Honda and Nissan mega-merger mooted

MOUNTING competition from larger global electric vehicle manufacturers has prompted Japanese auto giants Honda and Nissan to begin merger negotiations, Japan’s Nikkei newspaper has reported.

The duo has increased ties in recent months in a bid to compete in a challenging and fast-changing EV landscape, facing heavy competition from America’s Tesla and a growing number of new energy entrants from China.

The Nikkei reports that slowing demand in Europe and the United States has further intensified pressure upon traditional automotive marques, with Honda and Nissan saying they are “exploring various possibilities for future collaboration, leveraging each other’s strengths”.

The move follows a decision by the two companies earlier this year to work together on electric vehicle batteries and software.

It is understood the two manufacturers will operate under a single holding under the proposed merger, but the stakes each would hold in the new entity, along with other details, are to be decided later.

Each company said they will inform stakeholders of any updates at “an appropriate time”.

Further, French automaker Renault, a major Nissan shareholder, said it had “no information” on the matter and declined to comment.

It is unknown whether Mitsubishi, the third partner in the Renault-Nissan-Mitsubishi alliance, will be affected by the planned mega-merger, which is tipped to become the biggest in the industry since the $52 billion ($A81.8b) Stellantis merger between Fiat Chrysler and PSA in 2021.

The proposed merger would also place Honda and Nissan in better stead to compete with Toyota (which has stakes in Mazda, Subaru and Suzuki) both domestically and abroad.

Honda, Nissan, and Mitsubishi sold a combined four million vehicles globally in first half of 2024, well short of the 5.2 million units sold by Toyota.

With Automotive News, Nikkei