Nissan, Honda and Mitsubishi have launched negotiations to merge into the world’s third largest automaker

This week began with a press conference organized by representatives of Honda Motor and Nissan Motor, at which they announced the start of negotiations to create a single holding company by August 2026. Mitsubishi Motors, whose largest shareholder is Nissan, is also ready to join these companies. Negotiations are expected to be completed by June 2025.

Image source: Nissan Motor

In the Japanese market, Honda and Nissan occupy second and third places, respectively, but on a global scale, they can only claim seventh and ninth in their current state. However, after the merger, Honda, Nissan and Mitsubishi will be able to sell up to 8 million vehicles annually and become the third largest automaker in the world. The combined company will be able to receive revenue of $191 billion and operating profit of more than $19 billion. After the creation of the holding in August 2026, the shares of the companies that founded it will leave the stock exchange.

Apparently, Honda and Nissan will retain their trademarks on the market, but due to their greater capitalization, the former ($43 billion) will receive more seats on the board of directors, since Nissan has a capitalization of no more than $11 billion. Mitsubishi should make a decision on its participation in the creation of the holding company by January 2025. Honda Motor CEO Toshihiro Mibe said at a press conference: “The rise of Chinese automakers and new players has greatly changed the industry. We must build the capacity to fight them by 2030, otherwise we will fail.”

Honda and Nissan began thinking about collaborating on electric vehicles and software back in March of this year, but it has now become clear that they will need closer integration to survive. By August, Mitsubishi Motors naturally joined their alliance. By some estimates, the world’s 17 largest automakers now include four Chinese companies. BYD is just in eighth place between Honda and Nissan. If these Japanese players combine, they will move into third position, ahead of South Korea’s Hyundai Motor. The deal between Honda and Nissan will also be the largest in the auto industry since the creation of Stellantis in 2021. The new holding, subject to maintaining current sales volumes, will be second only to Volkswagen and Toyota Motor. Honda management now expects Nissan to take steps to improve its business, which should precede the creation of a single holding company.

These negotiations also affect the interests of the French Renault, which directly owns 17% of Nissan shares and controls another 18.7% indirectly through a trust, while Nissan is an investor in the Ampere subsidiary, which should allow Renault to produce competitive electric vehicles. News of the start of negotiations between Honda and Nissan caused Renault shares to decline by 1.2%, while Nissan shares rose 1.2% and Honda rose by a full 3.8%.