Honda And Nissan Are In Merger Talks

In a joint statement, the companies confirmed that talks are underway but provided no details or timeline for a possible deal.

It is also unclear what form a potential collaboration might take.

Nikkei initially reported on the talks on Tuesday.

“As announced in March, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” the statement read. “Any updates will be shared with stakeholders at the appropriate time.”

The companies also confirmed to CNN that Mitsubishi is involved in the preliminary discussions, potentially adding a third major Japanese automaker to the mix.

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Mitsubishi has not responded to requests for comment.

Earlier this year, Honda and Nissan announced plans to collaborate on electric vehicles (EVs), and in August, they revealed they would work together on battery technology.

However, deepening their partnership could prove beneficial, as both companies have encountered difficulties this year.

Both automakers, like many non-Chinese carmakers, have struggled in China, the world’s largest car market.

While foreign brands had been popular with Chinese consumers, domestic brands have gained favor due to better value perception and government incentives that promote the adoption of EVs and plug-in hybrids.

Although both Honda and Nissan offer EVs and plug-ins—Nissan, in particular, was an early leader in EV technology—Chinese brands like BYD have surpassed them in innovation and offer more affordable prices.

Nissan’s difficulties also stem from the fallout of its former CEO, Carlos Ghosn, fleeing Japan in 2019 after being arrested on charges of financial misconduct.

Ghosn, who denies the charges, was fired by Nissan, which disrupted the once-powerful alliance between Nissan, Renault, and Mitsubishi.

Renault has since drastically reduced its stake in Nissan, weakening the company.

From March to September, Nissan reported a 90% drop in operating income compared to the previous year.

Honda, which is about five times larger than Nissan, is also facing its own set of challenges.

The company plans to sell only zero-emission vehicles in major markets by 2040, but progress has been slow.

Factors such as low gas prices, insufficient charging infrastructure, and growing competition have dampened demand for EVs in the U.S. and Europe.