Honda and Nissan are considering the possibility of uniting under the roof of a new holding company

The redistribution of the automobile market, largely due to the rapid development of local electric vehicles in China, threatens the very existence of some companies with almost a century of history. Nissan and Honda, for example, are preparing to form a holding that will unite their activities, and expect to bring Mitsubishi Motors into its structure.

Image source: Honda Motor

Since Nissan Motor has owned a 24% stake in Mitsubishi Motors since the alliance with Renault and is the main shareholder of the Japanese automaker, it will be able to influence its strategic choice if necessary. Reuters reported yesterday that Honda and Nissan are in talks to create a parent holding company to pool resources amid growing competition. Nikkei added that the companies are ready to begin merger talks. Representatives of both companies later denied these rumors, noting that Honda and Nissan are considering various opportunities for cooperation. If any agreements are reached, shareholders will be notified of the decisions taken in a timely manner.

Honda and Nissan are the second and third largest Japanese automakers, respectively, behind only Toyota. Last year they managed to sell 7.4 million cars together, but against the backdrop of the rapid development of Chinese electric vehicle manufacturers, they are beginning to experience problems with selling products in the domestic market of China, which is the largest in the world. Honda and Nissan announced deepening cooperation back in March, and by August they agreed to jointly develop batteries, powertrains and other technologies used in electric vehicles. Nissan saw its net profit decline by more than 90% in the first half of the current fiscal year, and its operating profit forecast was cut by about 70%. Once the world’s most popular electric car, the Nissan Leaf, the company can now only offer a choice of two electric models, as the Ariya crossover has finally hit the market after delays. By 2026, Nissan promises to expand its range of hybrids to 16 models, while Honda relies on local partners like GM in the US and its joint ventures in China in its electrification strategy. According to some forecasts, the current financial situation will allow Nissan to exist independently for no more than a year, so the company will have to find a partner to receive investment in any case.