In a move that could reshape the automotive landscape, Nissan and Honda have officially signed a memorandum of understanding (MoU) to explore the possibility of a merger. If this deal materialises, the two companies are set to create a global mobility powerhouse with projected revenues exceeding 30 trillion yen (USD 190 billion) by 2026.
The merger, described as “business integration” in the official statement, aims to pool resources, optimise operations, and take on industry heavyweights like Toyota, Volkswagen, and Tesla. But how did this come about, and what does it mean for the future of the automotive sector?
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The road to merger: How it all started
Discussions around collaboration between Nissan and Honda began earlier this year. The first MoU was signed in March 2024, focusing on joint research in vehicle intelligence and electrification. This was followed by a second MoU in August, which aimed to deepen collaboration around software-defined vehicles (SDVs) and next-gen mobility solutions.
The latest agreement, signed in December 2024, formally kicks off the process of exploring a full-scale merger.
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Key highlights of the Nissan-Honda merger
| Details | Timeline/Value |
| Revenue Target | Over 30 trillion yen (USD 190 billion) |
| Operating Profit Target | Exceeding 3 trillion yen |
| Definitive Agreement | June 2025 |
| Shareholder Vote | April 2026 |
| Delisting of Nissan and Honda | August 2026 |
| New Holding Company Listing | August 2026 |
The two companies have set an ambitious target of finalising the definitive agreement by June 2025, with a shareholder vote scheduled for April 2026. If approved, the merger will take effect in August 2026, leading to the delisting of Nissan and Honda from the Tokyo Stock Exchange (TSE). A new joint holding company will be formed and listed in their place.
Upon completion, Nissan and Honda will become wholly-owned subsidiaries of the new holding company. Honda is expected to play a leading role, with the ability to nominate a majority of directors.
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Why merge now?
The automotive industry is undergoing rapid transformation, driven by the shift to electric vehicles (EVs) and increasing competition from Chinese automakers and Tesla. For Nissan and Honda, merging offers several strategic advantages:
1. Boosting global competitiveness
By combining forces, Nissan and Honda can streamline operations, reduce R&D costs, and standardise vehicle platforms. This will help the companies compete more effectively in the fast-evolving EV market.
2. Optimising manufacturing and supply chains
Pooling resources allows the automakers to optimise manufacturing plants, increase capacity utilisation, and cut production costs. Supply chain integration will further drive cost efficiencies by consolidating purchasing and sourcing operations.
3. Accelerating innovation
The companies will collaborate on next-gen software-defined vehicles (SDVs), battery technology, and autonomous driving systems. This will speed up innovation and enhance their product offerings.
Mitsubishi’s potential role in the merger
Adding another layer of intrigue, Mitsubishi Motors is also exploring the possibility of joining the alliance. Mitsubishi has signed a separate MoU and is expected to make a final decision by January 2025.
If Mitsubishi opts in, the merger will create the world’s third-largest automotive group by vehicle sales, trailing only Toyota and Volkswagen.
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What this means for investors
For investors, the Nissan-Honda merger represents a significant shift in the global automotive market. If successful, the combined entity could unlock tremendous value through:
- Cost synergies and higher profit margins
- Stronger market positioning in EV and hybrid segments
- Increased resilience to supply chain disruptions
However, the merger is still in its exploratory phase. As Nissan CEO Makoto Uchida highlighted:
“We are still at the stage of starting our review, but if realised, this merger has the potential to deliver unparalleled value to customers worldwide.”
Can this merger reshape the industry?
The potential Nissan-Honda merger echoes past automotive tie-ups, such as the Fiat Chrysler-PSA merger that created Stellantis in 2021. Just like Stellantis, the combined strength of Nissan and Honda could disrupt the market, particularly in the race to dominate electric mobility.
As the two companies continue their discussions, industry watchers and investors alike will be paying close attention to whether this ambitious plan materialises. One thing is clear – the automotive landscape is about to shift, and Nissan and Honda are gearing up to lead the charge.
