Honda and Nissan may be on the brink of a groundbreaking merger aimed at solidifying their position in the electric vehicle market, with Mitsubishi potentially joining later. Reports from Nikkei suggest this alliance could reshape Japan’s automotive industry, positioning the trio to challenge major players like Tesla and Chinese EV manufacturers, whose global influence continues to grow as demand for electric vehicles accelerates worldwide.
Combined sales for Honda and Nissan in 2023 exceeded 8 million units, which could place the merged entity as the world’s third-largest automaker. Only Toyota and Volkswagen, with 11.2 and 9.2 million sales respectively, would remain ahead. Sources suggest that talks are nearing a memorandum of understanding, possibly leading to the creation of a single holding company to manage the new conglomerate’s operations.
Collaborative efforts among these automakers have been ongoing. Earlier this year, Honda and Nissan teamed up on EV and software projects, and Mitsubishi joined the mix in August. Nissan’s 34% stake in Mitsubishi adds another layer to the partnership, which already benefits from Nissan’s longstanding alliance with Renault. Honda and Mitsubishi also collaborated on EV battery leasing through their joint venture, Altna.
Consolidation efforts are fueled by the need to streamline costs and regain ground in the EV race. Japanese automakers are shifting focus after years of prioritizing hydrogen fuel cells, while Chinese rivals surge ahead in EV dominance. Toyota, Mazda, and Subaru recently unveiled a partnership to advance internal combustion technology, reflecting a broader industry trend of alliances to stay competitive.
Challenges for Nissan continue to mount. Struggling with declining sales in the U.S. and China, the automaker recently announced a workforce reduction of 9,000 employees—approximately 6.7% of its total staff—and plans to cut production capacity by 20%. A Financial Times report warned that without a turnaround, Nissan might face operational viability concerns within 12 to 14 months.
