Honda, Nissan Confirm Merger Plans To Offset Chinese EV Competition: How Mitsubishi Factors In
Honda Motor Company, Ltd and Nissan Motor Co., Ltd confirmed their merger plans at a joint press conference on Monday and said they aim for a completion date of August 2026. If successful, the merger would create the world's third-largest automobile group based on global sales volume.
The automakers plan to establish a new holding company, with Honda to appoint most of the board members and president of the new company. "We have confirmed again that our business integration will bring about synergy in all areas and that the impact of this will be greater than expected," Honda President Toshihiro Mibe said, per the Japan News. "We aim to set a direction by the end of January," he added. The companies are considering including Mitsubishi Motors in the new consolidated company. Nissan is Mitsubishi's largest shareholder with a 24% stake in the company, and its president was present at Monday's joint press conference. Why It Matters: Tokyo-based Honda could prove to be a lifeline for Nissan, which has struggled with declining vehicle sales in the U.S. and globally. The automakers have already developed a partnership developing next-gen electric vehicle platforms. The merger would also allow both companies to pool resources and reduce development costs in the face of increasing competition from Tesla, an American multinational automotive and clean energy company and Chinese automakers, including Tesla, BYD, NIO, and Li Auto.
“Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing," Honda Director and Representative Executive Officer Toshihiro Mibe said. Nissan, based in Yokohama, Japan, has seen it sales in China drop, with 2023 sales reduced to nearly half of its 2019 sales volumes which counted for 1 in 3 of Nissan’s global sales at the time. "These Nissan-Honda merger discussions, coupled with the recent challenges at Stellantis and production cutbacks in Europe, all point to a single, stark reality: a new force has emerged in the automotive sector, and legacy automakers need to be acutely aware of the competitive threat," said Moody's Michael Brisson said referring to the Chinese automakers, per Yahoo Finance.
Honda, Nissan aim to merge by 2026 in historic pivot
(From left) Nissan CEO Makoto Uchida, Honda CEO Toshihiro Mibe and Mitsubishi Motors CEO Takao Kato at a joint press conference in Tokyo on Dec 23
Honda and Nissan are in talks to merge by 2026, they said on Dec 23, a historic pivot for Japan’s auto industry that underlines the threat Chinese EV makers now pose to the world’s long-dominant legacy carmakers. The tie-up would create the world’s third-largest auto group by vehicle sales after Toyota and Volkswagen. It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD.
The merger of Honda, Japan’s second-largest automaker, with Nissan, its No. 3, would be the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a US$52-billion (S$70.57-billion) deal. Smaller Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining and would make a decision by the end of January, the companies said. The chief executives of all three held a joint press conference in Tokyo. “The rise of Chinese automakers and new players has changed the car industry quite a lot,” said Honda chief executive Toshihiro Mibe, citing technological trends of electrification and autonomous driving. "We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten."
The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they said. They aimed to wrap up talks around June 2025 before setting up a holding company by August 2026, when shares of both companies would be delisted. Honda, which has a market capitalisation of more than $40 billion, roughly four times that of Nissan, will appoint the majority of the company's board, they said. Combining with Mitsubishi Motors would take the Japanese group's global sales to more than 8 million cars. The current No. 3 is South Korea's Hyundai (005380.KS), opens new tab and Kia (000270.KS), opens new tab. Honda and Nissan have been exploring ways to bolster their partnership, including a merger, Reuters reported last week.
Honda, Nissan formalise merger talks, aim to combine by 2026
For Nissan, the merger with Honda could provide much-needed relief after paltry sales in the US and China triggered a massive drop in revenue
Honda Motor and Nissan Motor took their first historic steps toward merging to create a new force in the world’s automotive industry, as aggressive competition from China forces legacy carmakers to rethink their business models. The two Japanese auto manufacturers signed a basic agreement for merger talks on Monday (Dec 23), according to a joint media briefing held in Tokyo. Honda also said it will buy back as much as 1.1 trillion yen (S$9.5 billion) of its own shares.
A holding company will be created to house the new entity and should be listed by August 2026, the firms said, adding that Honda will be able to nominate a majority of directors of the holding company. Mitsubishi Motors, which is 24.5 per cent owned by Nissan, also signed the memorandum of understanding and will likely be part of the group, with a final decision on that expected by the end of January. Honda’s buyback cancels a previously announced buy back of 100 billion yen and will start on Jan 6 and run through most of 2025, according to Monday’s announcement. The company plans to repurchase as many as 1.1 billion shares, or almost 24 per cent of its stock excluding treasury securites. Honda chief executive officer Toshihiro Mibe said synergies from the combined company should lead to an increase in operating profit of more than 1 trillion yen, climbing to 3 trillion yen eventually.
“Both companies will continue as wholly owned subsidiaries of the joint holding company with their respective brands in place,” Mibe said. The holding company will include the brands of both Honda and Nissan, and wrap in Honda’s large motorcycle unit. Such an alliance would give rise to one of the world’s largest carmakers, pitting the trio against Toyota Motor at home and Chinese automakers including BYD and Geely Automobile Holdings abroad. Toyota has stakes in Subaru, Suzuki Motor and Mazda Motor, creating a powerhouse of brands backed by its top-notch credit rating. All three Japanese companies are to some degree facing an existential threat brought on by the global automobile industry’s breakneck shift to battery-powered electric vehicles and hybrid drivetrains and away from combustion engine cars.
Here are two seismic changes pushing Honda and Nissan into merger talks
Nissan and Honda are in talks for a merger with the goal to complete it by 2026. It's yet another sign of the big changes hitting the auto sector.
Honda and Nissan have started talks to pursue a merger, a deal that could create the world's third-biggest automaker.
The two major Japanese companies are hoping that joining hands will allow them to better compete in an automotive world that's facing seismic changes. Two massive forces are at play currently: The global auto industry is in the midst of a historic shift to electrification at the same time that the world's largest automakers are facing a formidable competitor in China.
As Honda and Nissan start talks with the goal of completing a merger by 2026, here are a few things to know:
- China is winning ... in China and abroad
- Honda and Nissan are not creating buzzy EVs
- Not all mergers makes sense
- What would it mean for American consumers?
Nissan and Honda announce plans for merger: Here's what to know
Nissan and Honda have announced plans to merge by 2026 in a seismic shift for the Japanese auto industry. The two carmakers signed a memorandum of understanding that allows them to continue discussions about integration via a joint holding company, the companies announced.
If Nissan and Honda are do integrate, they could become the third-largest auto group in the world, Reuters. Mitsubishi Motors, of which Nissan owns a 24% stake, will announce if the company will join the merger by the end of January.
"The rise of Chinese automakers and new players has changed the car industry quite a lot," said Honda CEO Toshihiro Mibe at a press conference, citing technological trends of electrification and autonomous driving. "We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten." Once the merger is complete, Honda and Nissan aim to have combined sales of $191 billion, according to Reuters.
Nissan and Honda announce merger plans to create world’s no. 3 automaker
Makoto Uchida, Nissan's president and CEO, and Toshihiro Mibe, president of Honda, hold a joint press conference on their merger talks in Tokyo on December 23, 2024
Honda and Nissan have formally agreed to hold talks over the next six months on a possible merger, a deal that would create the world’s third-largest automaker and give them more resources to compete with a growing threat from Chinese carmakers.
A third, smaller Japanese automaker, Mitsubishi, which is already in an alliance with Nissan, will also participate in the talks. The combined company, should it be created, would trail only Toyota (TM) and Volkswagen in global sales.
Mergers in the auto industry are nothing new. They have taken place since the acquisition of various brands formed General Motors (GM) in the first decade of the 20th century. But they sometimes have trouble succeeding bringing together different partners.
Honda, Nissan aim to merge by 2026 as automakers formalize talks
Nissan Motor CEO Makoto Uchida (L), Honda Motor CEO Toshihiro Mibe (C) and Mitsubishi Motors President Takao Kato (R) pose during a photo session following a joint press conference on December 23, 2024, in Tokyo, Japan. Photo by Tomohiro Ohsumi
Honda Motor Co. and Nissan Motor Co. took their first historic steps toward merging, in hopes of creating a juggernaut that can survive aggressive competition from China that’s roiling the industry. The two Japanese auto manufacturers signed a basic agreement for merger talks on Monday and held a joint media briefing in Tokyo. Honda also said it will buy back as much as ¥1.1 trillion yen (US$7 billion) of its own shares.
A holding company will be created to house the new entity and should be listed by August 2026, the firms said, adding that Honda will be able to nominate a majority of the new company’s board of directors. Mitsubishi Motors Corp., which is 24.5 per cent owned by Nissan, also signed the memorandum of understanding and will likely be part of the group with a final decision on that expected by the end of January. Such an alliance would give rise to one of the world’s largest carmakers, pitting the trio against Toyota Motor Corp. at home and Chinese automakers abroad, including BYD Co. and Geely Automobile Holdings Ltd. Toyota has stakes in Subaru Corp., Suzuki Motor Corp. and Mazda Motor Corp., creating a powerhouse of brands backed by its top-notch credit rating.
Yet while forecasting an operating profit of more than ¥1 trillion that would eventually climb to ¥3 trillion for the combined entity, Honda chief executive Toshihiro Mibe did not address how the companies would combine their businesses to face pressing issues like shutting or streamlining factories. “Both companies will continue as wholly owned subsidiaries of the joint holding company with their respective brands in place,” Mibe said. Honda will take the lead as the new company is being formed, he said, underscoring the company’s much stronger position versus Nissan, whose sales have slumped amid a lineup of cars that consumers no longer find exciting.
Honda and Nissan to merge, Honda will take the lead
Beleaguered automaker Nissan is going to throw its lot in with Honda. The two Japanese OEMs want to merge by 2026, creating the world's third-largest car company in the process. In fact, earlier this year the two signed memorandums of understanding to create a strategic partnership focused on software and electrification. Now, the changing business environment calls for deeper integration, they say.
"Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone," said Makoto Uchida, Nissan's president and CEO.
"Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing" said Honda director Toshihiro Mibe. "Honda and Nissan are two companies with distinctive strengths. We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order to find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams." Currently, Honda is an independent OEM, albeit one with strong links to General Motors. Meanwhile, Nissan currently forms one part of an alliance, together with France's Renault and the also-Japanese Mitsubishi. But the Renault-Nissan alliance has not been entirely smooth.
Honda, Nissan merger 'like two weak swimmers helping each other'; analysts see risks
The plan announced Monday by Japanese automakers Honda and Nissan to merge by 2026 highlights how the rise of Chinese automakers such as BYD is pressuring the industry to look for potential cost savings and increased scale, auto industry analysts told the Free Press. They suggested that consumers could benefit eventually, but any impact on the Detroit Three will take time to unfold.
They also pointed to the last major merger in the industry: the creation of Stellantis in 2021, to show that such endeavors are challenging to pull off successfully. Stellantis, owner of Jeep, Ram, Chrysler, Dodge and Fiat, has struggled in particular this year, even saying goodbye to CEO Carlos Tavares amid fights with key stakeholders, sales declines and excess inventory.
A completed Honda-Nissan merger would create the third-largest global automaker by vehicle sales after Toyota and Volkswagen. The news comes as the incoming Trump administration’s tariff threats add more uncertainty to the industry landscape. The plans, announced Monday in Tokyo, would seek to set up a holding company with Honda, the larger of the two, selecting the majority of the board members, according to Reuters, which noted that Mitsubishi is also considering joining and that the combined group would mean annual global sales of more than 8 million vehicles.
Honda
Headquarters in Minato, Tokyo
Honda Motor Co., Ltd. (Japanese: 本田技研工業株式会社, Hepburn: Honda Giken Kōgyō Kabushiki gaisha, lit. 'Honda Institute of Technology and Industry Joint-Stock Company', IPA: [honda] ⓘ; /ˈhɒndə/) is a Japanese multinational conglomerate automotive manufacturer headquartered in Minato, Tokyo, Japan.
Founded in October 1946 by Soichiro Honda, Honda has been the world's largest motorcycle manufacturer since 1959, reaching a production of 400 million by 19 December 2019. It is also the world's largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda became the second-largest Japanese automobile manufacturer in 2001. In 2015, Honda was the eighth largest automobile manufacturer in the world.
Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, on 27 March 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft, power generators, and other products. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which began production in 2012. Honda has two joint-ventures in China: Dongfeng Honda and GAC Honda.
Nissan
Nissan headquarters in Yokohama, Kanagawa Prefecture
Nissan Motor Corporation (日産自動車株式会社, Nissan Jidōsha kabushiki gaisha) is a Japanese multinational automobile manufacturer headquartered in Yokohama, Kanagawa, Japan. The company sells its vehicles under the Nissan and Infiniti brands, and formerly the Datsun brand, with in-house performance tuning products (including cars) under the Nismo and Autech brands. The company traces back to the beginnings of the 20th century, with the Nissan zaibatsu or called Nissan Group.
Since 1999, Nissan has been part of the Renault–Nissan–Mitsubishi Alliance (Mitsubishi joining in 2016), a partnership between Nissan and Mitsubishi Motors of Japan, with Renault of France. As of November 2023, Renault holds a 15% voting stake in Nissan, while Nissan holds the same stake in Renault.[8] Since October 2016 Nissan holds a 34% controlling stake in Mitsubishi Motors.
In 2017, Nissan was the sixth largest automaker in the world, after Toyota, Volkswagen Group, Hyundai Motor Group, General Motors and Ford. In 2014, Nissan was the largest car manufacturer in North America.[11] With a revenue of $78 billion in 2022, Nissan was the ninth largest automobile maker in the world, as well as being the leading Japanese brand in China, Russia, and Mexico.
Mitsubishi Motors
Mitsubishi Motors Corporation (三菱自動車工業株式会社, Mitsubishi Jidōsha Kōgyō KK, lit. 'Mitsubishi Automotive Industry Company', /mɪtsʊˈbiːʃi/, Japanese pronunciation: [mitsɯꜜbiɕi]) is a Japanese multinational automobile manufacturer headquartered in Minato, Tokyo, Japan.[6] In 2011, Mitsubishi Motors was the sixth-largest Japanese automaker and the 19th-largest worldwide by production. Since October 2016, Mitsubishi has been one-third (34%) owned by Nissan, and included in the Renault–Nissan–Mitsubishi Alliance
Besides being part of the Renault–Nissan–Mitsubishi Alliance, it is also a part of Mitsubishi keiretsu, formerly the biggest industrial group in Japan. The company was originally formed in 1970 from the automotive division of Mitsubishi Heavy Industries.
Mitsubishi Fuso Truck and Bus Corporation, which builds commercial-grade trucks, buses, and heavy construction equipment, was formerly a part of Mitsubishi Motors, but is now owned by German automotive corporation Daimler Truck, with Mitsubishi continuing to own a small stake.
Tesla vs BYD in epic showdown: The biggest electric car battle that awaits 2025
Tesla and BYD have been gunning for the electric car crown for some time now. But the stakes are all set to get higher still come 2025.
Who will come up on top and who have to walk away with the consolation prize? The 2024 round has not been decided yet but both Tesla and BYD have been firing on all cylinders through the course of the past 12 months.
While BYD offers both plug-in hybrids as well as all-battery models against Tesla's electric-only lineup, it recently began its global expansion project. Some dub it a 'David vs Goliath' battle but the question really is which is which?
Tesla Inc
Gigafactory Texas, Tesla's headquarters, just outside of Austin, Texas
Tesla, Inc. (/ˈtɛslə/ TESS-lə or /ˈtɛzlə/ TEZ-lə[a]) is an American multinational automotive and clean energy company. Headquartered in Austin, Texas, it designs, manufactures and sells battery electric vehicles (BEVs), stationary battery energy storage devices from home to grid-scale, solar panels and solar shingles, and related products and services.
Tesla was founded in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors. Its name is a tribute to inventor and electrical engineer Nikola Tesla. In February 2004, Elon Musk joined as Tesla's largest shareholder; in 2008, he was named chief executive officer. In 2008, the company began production of its first car model, the Roadster sports car, followed by the Model S sedan in 2012, the Model X SUV in 2015, the Model 3 sedan in 2017, the Model Y crossover in 2020, the Tesla Semi truck in 2022 and the Cybertruck pickup truck in 2023. In June 2021, the Model 3 became the first electric car to sell 1 million units globally.[6] In 2023, the Model Y was the best-selling vehicle, of any kind, globally. In January 2024, the Model Y became the best-selling BEV in history.
Tesla is one of the world's most valuable companies in terms of market capitalization. Starting in July 2020, it has been the world's most valuable automaker. From October 2021 to March 2022, Tesla was a trillion-dollar company, the seventh U.S. company to do so, and has been so again since November 2024. In 2023, the company led the battery electric vehicle market, with 19.9% share. Also in 2023, the company was ranked 69th in the Forbes Global 2000.
BYD Auto
BYD Auto Co., Ltd
BYD Auto Co., Ltd. (Chinese: 比亚迪汽车; pinyin: Bǐyàdí Qìchē) is the main automotive subsidiary and brand of BYD Company, a publicly listed Chinese multinational manufacturing company. It manufactures passenger battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), collectively known as new energy vehicles (NEVs) in China. It also produces electric buses and trucks. The company sells its vehicles under the main BYD brand and high-end vehicles under its Denza, Yangwang and Fangchengbao brands.
BYD Auto was established in January 2003 by Wang Chuanfu, the founder of BYD Company, following the acquisition of Xi'an Qinchuan Automobile. The first car designed by BYD, the BYD F3, began production in 2005. In 2008, BYD launched its first plug-in hybrid electric vehicle, the BYD F3DM, followed by the BYD e6, its first battery electric vehicle, in 2009.
BYD Auto has experienced substantial sales growth since 2020, driven by the increasing market share of new energy vehicles in China. Since 2021, the company has expanded sales of electric passenger cars into overseas markets, mainly to Europe, Southeast Asia, Oceania and Latin America. In March 2022, BYD ended production of purely internal combustion engined cars to focus on new energy vehicles. In the fourth quarter of 2023, BYD was the top-selling battery electric vehicle manufacturer in the world ahead of Tesla.[8] BYD was also the best-selling car brand in China in 2023, overtaking Volkswagen, which had held the title since the liberalisation of the Chinese automotive industry.[9] BYD is also the third most valuable car manufacturer in the world, based on market capitalization.
Nio Inc
Nio House in Beijing, China
Nio Inc. (Chinese: 蔚来; pinyin: Wèilái; stylized as NIO) is a Chinese multinational automobile manufacturer headquartered in Shanghai, specializing in designing and developing electric vehicles. The company was established in 2014 and adopted its current name in 2016. In 2018, Nio filed for an initial public offering on the New York Stock Exchange. The company expanded its sales to the European market in 2021. As of 2023, Nio has two manufacturing plants in Hefei, Anhui Province, China, in collaboration with state-owned vehicle manufacturer JAC Group.
The company is notable for developing and operating battery-swapping stations for its vehicles, as an alternative to conventional charging stations. It operates over 1,300 battery swap stations in China.[5] It also develops semi-autonomous and autonomous vehicle technologies. Nio has participated in Formula E racing since 2014. In 2024, Nio established a new electric car brand called Onvo, targeting the mainstream market.
After the brand launch on November 21, 2016 in the Saatchi Gallery in London, England, several companies invested in Nio, including Tencent, Temasek, Sequoia, Lenovo and TPG. Its first model, the Nio EP9 sports car, debuted the same day.
Li Auto
Li Auto R&D base in Gaoliying, Beijing
Li Auto Inc. (Chinese: 理想汽车; pinyin: Lǐxiǎng Qìchē; lit. 'ideal car') is a Chinese electric vehicle manufacturer headquartered in Beijing, with manufacturing facilities in Changzhou. Founded by Li Xiang in 2015, the company mainly builds electric vehicles that use range extenders for a power supply.[3] Li Auto has vehicle manufacturing, engineering, and design services located in Changzhou, Jiangsu with corporate headquarters and research and development located in Beijing
In 2015, Li Xiang, founder of Chinese website PCPop and automotive website Autohome.com.cn, created a company called Beijing Chehejia Information Technology (Chehejia translates as "Car and Home"). It started its operations by developing and producing low-speed EVs that targeted car-sharing and ride-hailing services. In 2018, Chehejia reached an agreement for a joint venture with DiDi, China’s largest ride-hailing service company, but the plan collapsed shortly afterward. In the first half of 2018, Chehejia abandoned the low-speed EV project due to the lack of support from the Chinese central government for legalizing the EV category.
In 2019, the holding company Chehejia Technologies, based in the Cayman Islands, rebranded itself as Leading Ideal Inc. The following year, it shortened the name to Li Auto, and the company was renamed Li Auto Inc. In Chinese, the brand is commonly known as Lixiang (理想). Li Auto Beijing manufacturing base in Shiyuan, Shunyi District, Beijing Li Auto unveiled its first model named the Li One in April 2019, with production beginning in November of the same year.
