Nissan and Honda to attempt a merger to create the world’s no. 3 automaker
24 Dec 2024, 05:42 PM
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Japanese automakers Honda, Nissan, and Mitsubishi Motors have announced plans to work toward a merger that would form the world’s third-largest automaker by sales. The three companies have signed a memorandum of understanding to jointly discuss a framework for further intelligence and electrification of automobiles based on the agreement signed by Nissan and Honda on March 15.
“Today marks a pivotal moment,” Nissan CEO Makoto Uchida said in a statement announcing the negotiations. “Together, we can create a unique way for (customers) to enjoy cars that neither company could achieve alone.”
Japanese automakers have lagged behind their big rivals in electric vehicles and are trying to cut costs and make up for lost time. The growing electric car market has been increasingly dominated by Chinese-made electric vehicles, including BYD, which have posed a threat to some of the world’s best-known car firms.
Nissan, Honda, and Mitsubishi announced in August that they would share components for electric vehicles, like batteries, and jointly research software for autonomous driving to adapt better to dramatic changes around electrification after a preliminary agreement in March.
The merger, which would include Mitsubishi—of which Nissan is the biggest shareholder—would allow all three companies to share resources against other electric vehicle competitors such as Tesla.
Honda CEO Toshihiro Mibe says the biggest benefits of combining under the new holding company won’t materialize until after 2030. “We have the potential to be a world-class, leading company in new mobility,” Mibe says. “By 2030, we need the artillery to compete on the battlefield. So, we are starting today.”
Moreover, the integration of the two storied Japanese brands would mark the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a $52bn deal.
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