Honda and Nissan are taking a monumental step by merging to form what could become the world’s third-largest carmaker. On Monday, the presidents of Honda and Nissan, Toshihiro Mibe and Makoto Uchida, signed a memorandum of understanding. The new holding company is set to launch by August 2026, placing the alliance behind only Toyota and Volkswagen.
Read more: Honda and Nissan are in Talks to Deepen Ties and Possibly Merge
The merger includes Mitsubishi Motors, a smaller alliance member, combining the strengths of three automakers with a combined market capitalisation of over $50 billion. Honda, valued at $40 billion, will take the lead in managing the merged entity. Nissan’s current valuation of $10 billion reflects its recent struggles, including workforce reductions and a 2023 quarterly loss of 9.3 billion yen ($60 million).
Despite criticism from former Nissan chairman Carlos Ghosn, who called the merger a “desperate move,” the partnership could benefit all parties. In 2023, Honda produced 4 million vehicles, Nissan made 3.4 million, and Mitsubishi contributed just over 1 million. Together, they plan to manufacture about 8 million vehicles annually while focusing on electric vehicles (EVs) and autonomous driving technologies.
This move represents Japan’s effort to catch up with global EV leaders and marks the largest shift in the automotive industry since Fiat Chrysler and PSA merged to create Stellantis in 2021. By sharing EV components and technologies, Honda and Nissan aim to reduce costs and accelerate innovation in a rapidly evolving market.
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