Plans announced, including Mitsubishi, and Japan trying to seize the electric vehicle market.
Japan's Honda and Nissan are planning a merger, which would create the world's third-largest carmaker as the industry moves away from fossil fuels.
The two presidents of the company, Toshihiro Mibe of Honda and Makoto Uchida of Nissan, signed a memorandum of understanding on Monday, planning to establish a holding company by August 2026, which could be the third in the market after Toyota and Volkswagen.
Honda, Japan's second-largest carmaker, is widely seen as the only national partner that can save Nissan, which has struggled since he took over as chairman. Carlos Ghosn was arrested on charges of fraud and misappropriation of company funds in 2018.
Ghosn, who has denied the allegations and fled to Lebanon after being released on bail, described the proposed union as a “desperate move” in a video call to reporters – report on Monday.
Nissan, worth about $10bn, said in November it was cutting 9,000 jobs, or 6 per cent of its global workforce, and reducing its global production capacity by 20 per cent after reporting a loss quarterly of 9.3 billion yen ($60m).
But the merger, which would also include a smaller member of the Nissan alliance Mitsubishi Motors, could lead to a behemoth worth more than $50bn based on the market capitalization of the three car makers.
Honda's Mibe said the company, which is currently valued at more than $40bn, would initially lead the new direction of the merged entity.
The next gen
Japanese automakers have fallen behind their big rivals electric vehicles and they are trying to cut costs and make up for lost time.
The three companies, which announced in August that they would share components for electric vehicles (EVs) such as batteries and diagnostic software for autonomous driving, would make about 8 million vehicles.
In 2023, Honda produced 4 million and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million.
Sam Fiorani, vice president of AutoForecast Solutions, a global automotive forecaster, said Nissan's expertise in building batteries, electric vehicles and gas-electric hybrid powertrains could help Honda develop its own EVs and next-gen hybrids.
The merger of the two famous Japanese brands would mark the biggest restructuring of the global auto industry since Fiat Chrysler Automobiles and PSA joined forces in 2021 to create Stellantis in a $52bn deal.
