Nissan Honda Merger: A Strategic Move to Compete with Chinese Automakers

CHINA – In recent news, Honda and Nissan, two of Japan’s largest automakers, have confirmed plans to merge and create the world’s third-largest automaker together with Mitsubishi. The move aims to strengthen their offerings in the face of intense competition from Chinese electric vehicle (EV) manufacturers.

This ambitious integration process, which includes defining the name, headquarters, and shareholding structure, will gradually unfold until June 2026.

Regarding the leadership of the new entity, it has been established that the directors will be selected by Honda, representing a significant step in strengthening their presence in the global automotive industry.

Key Reasons for the Merger:

• Competition from Chinese Automakers: Chinese companies like BYD, Nio, and Geely have disrupted the global auto market with affordable EVs and advanced technology. Honda, Nissan and Mitsubishi seek to counter this threat by sharing resources and expertise.

• Electrification Transition: The global auto industry is undergoing a significant shift towards electrification. By merging, they can accelerate their own EV development and reduce costs through economies of scale.

• Cost-Cutting and Job Reductions: Nissan, in particular, has struggled with declining sales and profits. The merger may involve significant job reductions and cost-cutting measures to improve efficiency and competitiveness.