Honda and Nissan, Japan’s biggest automakers, are reportedly set to begin talks about a possible merger as they face fierce competition in the fast-changing electric vehicle (EV) space.
Both companies issued almost identical statements confirming that they are exploring ways to deepen the partnership and will update stakeholders later. Although they did not announce the merger talks directly, reports from the Japanese news agency Nikkei suggest that there may be a significant change.
Faced with growing pressure from Chinese EV manufacturers and shrinking profit margins in their electrification efforts, Honda and Nissan have been forging a closer relationship in recent months. In March this year, the companies agreed to cooperate in the development of electric vehicles, and in August they had expanded their partnership to include EV batteries, e-axles, and other key technologies.
Insiders indicate that the two automakers are considering putting themselves under a single holding company, to streamline operations and consolidate Mitsubishi Motors—where Nissan is the largest shareholder with a 24% stake—into the new entity. This development could reshape the automotive landscape around the world and be the biggest merger in the industry since Fiat Chrysler joined PSA in 2021 to create Stellantis.
The joint operation of Honda-Nissan will address the growing challenges faced by traditional car manufacturers. Combined, Honda and Nissan sold 7.4 million vehicles worldwide last year, but both saw a slowdown in China’s booming EV market. China accounted for nearly 70% of global EV sales last November, with domestic brands such as BYD surging ahead, putting incumbent players under pressure to consolidate and consolidate R&D resources, manufacturing, and supply chains.
Nissan’s latest commitment shows that the company is still committed to achieving zero emissions targets in Europe and the UK, despite market volatility. It plans to refurbish its Sunderland plant into an EV production hub and build a third gigafactory underpinning Nissan’s ambition, while Honda is also keen to accelerate its electrification strategy.
Should Honda and Nissan complete the merger, it would mark the most significant change in the industry since Stellantis was founded two years ago. Stellantis’ consolidation has been driven in part by mutual market pressures and cost savings needs. Amidst this volatility, global players including General Motors and Ford have scaled back EV investments due to weak charging infrastructure, high borrowing costs, and uncertain consumer adoption.
As the auto industry continues to change at a rapid pace, the potential Honda-Nissan merger shows how die-hard automakers are struggling to adapt, consolidate, and stay competitive in a market that increasingly rewards scale, innovation, and rapid response to new consumer needs.
