6:53 am, December 24, 2024
Japanese car makers Honda and Nissan have announced plans to merge in a move that would make the group the third largest car maker in the world by sales.
In a joint statement this week, the two firms said they had signed a ‘memorandum of understanding’ which would wrap Mitsubishi in as part of the deal too.
The complicated deal would see the firms share platforms and technology to take on the might of Tesla and emerging Chinese rivals, such as BYD.
Nissan and Honda have lost ground globally to these emerging car makers. Talks will continue into the middle of next year as they aim to set up a new holding company by August 2026.
Honda will lead the new management and the two firms plan to list the holding company on the Tokyo Stock Exchange.
Honda has a market cap of more than $40bn while Nissan is worth $10bn.
Nissan CEO Makoto Uchida said: ‘Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future.
‘If realised, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.’
Honda director Toshihiro Mibe added: ‘By bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing.’
Renault – a major shareholder in Nissan – said it ‘acknowledged’ the announcements and will ‘consider all options based on its best interests’.
There is no word on what the combined group would be called, but it would put it behind Toyota and Volkswagen as the third largest car firm in the world.
Carlos Ghosn, the former boss of Nissan who fled to Lebanon in a musical instrument case and remains a fugitive there, said he did not think the plan would work.
Speaking to an online press conference, he said: ‘The first thing that you look at when you want to envision an alliance or a partnership is a complementarity between the two partners.
‘I look at the complementarity between Honda and Nissan and I see none. The two companies are two Japanese companies. They are strong in the same fields. They are weak in the same fields.
‘Both of them have very developed technologies. From an industrial point of view, there is duplication everywhere. So, industrially, for me, that doesn’t make sense.’
Reports also suggested that Honda may consider a return to manufacturing in the UK if the partnership goes ahead.
Nissan has a huge plant at Sunderland that is currently well under capacity. It is able to produce 600,000 cars a year but currently makes around 340,000.
Honda closed its plant in Swindon in 2021, but reports from Japan suggested that the merger could see the two firms jointly produce cars in the North East.
Honda currently has no car production facilities in Europe. Last year Nissan announced a £2bn upgrade to Sunderland where it makes the popular Qashqai, Juke and electric Leaf models.
