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The trio aims to create the world’s 3rd largest automaker. Shared tech for batteries, autonomous systems, and hybrid vehicles is central to the partnership. If merged, the brands could achieve over $50B in market cap and 8M annual vehicle sales. Both Honda and Nissan struggle in India; the merger could reshape their strategies in the market.
Japan’s major auto players, Honda and Nissan recently signed a MOU (memorandum of understanding) to explore a strategic partnership focused on new technologies or intelligence and electrification. Mitsubishi Motors also joined discussions with aim to evaluate its involvement in the integration and make a final decision by January, 2025. This merger will potentially create the world’s third-largest OEMs by sales as the automobile industry is undergoing major shift towards electrification.
Focus on EVs and Hybrid Powertrains
The automakers have agreed to explore and work towards greater synergy in EV components and autonomous driving technology. If the three players merge, this might result into them becoming over $50 billion brand in terms of market capitalisation and the accumulative sales would be over 8 million vehicles. Though Toyota would remain the largest Japanese player as they rolled out 11.5 million vehicles in 2023.
In August, this year Nissan, Honda and Mitsubishi announced to share electric vehicle components including batteries, and research software for autonomous technologies. In March, Nissan and Honda signed an agreement for the same.
A Desperate or Survival Move
Nissan has been bleeding money off late, and they are left with funds that could run the brand for about 12-14 months. Plight for Nissan started with the arrest of Renault-Nissan’s ex-chairman Carlos Ghosn in late 2018 who was found guilty of fraud and misuse of company’s assets. Speaking to media via a video conference, Ghosn called the merger a desperate move by the company.
What is in Here for Honda?
What benefits Honda of this merger is the access to Body-on-frame SUVs from Nissan that the former brand lacks. Nissan is also one of the first carmakers to taste success in electric vehicles. They are also big in Hybrid powertrains that goes well with Honda’s aspirations to make its EVs and next-gen hybrid vehicles. Though the brand is struggling to exist as it had announced to cut 9,000 jobs that contribute to around 6% of its workforce globally.
We also saw some changes at the management level along with the company’s CEO proposing 50% pay-cut to help ease the financial troubles. Due to financial woes, Nissan’s share prices dropped massively. After the merger news broke out, Nissan’s shares grew by 1.6% in a day, and around 20% in a week’s time.
Effect on India
Things in India too are not good for Nissan as they lack product offerings and managing to hardly sell 3000 units a month. Honda too is struggling here and has decided to bring in three new energy vehicles in the next 3 years. What happens in India after the merger, is yet to be seen. Stay tuned to CarLelo for more updates on this.
Also Read: 2 Hyundai e-SUVs To Debut On January 17 - Auto Expo 2025
About Author
Chhavi
Sub-Editor
Chhavi Kaushik is a seasoned content writer with over a decade of experience, beginning her career in 2010. Her fascination with automobiles led her to the industry in 2014. As a freelancer, She has contributed to some of the most reputed online automotive publications, consistently delivering fresh updates on the latest automotive events, product launches, car reviews, and critical industry insights.
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