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Honda Motor and Nissan Motor are reportedly in the process of merging their companies and will start negotiations soon, according to Japanese media.
The news, first reported by the Nikkei newspaper on Tuesday, comes as both auto giants struggle to compete with the world’s biggest electric vehicle (EV) manufacturers, including Tesla and China’s BYD.
The merger plans have not been confirmed by both companies. On Tuesday, both companies issued similar statements dispelling the reports.
“As announced in March of this year, Honda and Nissan are looking at different ways to work together in the future, to use each other’s strengths,” said the companies in separate statements.
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Nissan and Honda are reportedly in talks to merge their companies. (Getty Images / Getty Images)
Honda and Nissan are the second and third largest car manufacturers in Japan, respectively, with Toyota leading both.
The separate market caps of Honda and Nissan are estimated at 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion).
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Honda and Nissan are the second and third largest car manufacturers in Japan, respectively, with Toyota leading both. (Kyodo via Reuters Connect / Reuters Images)
In November, Nissan decided 9,000 employees worldwide in a set of massive layoffs, reducing its global production capacity by 20%.
At the time, the company explained that it was “facing a difficult situation” and laid out a plan to achieve “healthy growth.” The goals included reducing fixed costs by 300 billion yen (about $1.9 billion) and variable costs by 100 billion yen (about $649 million).
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The separate market caps of Honda and Nissan are estimated at 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion). (Ty Wright/Bloomberg via Getty Images/Getty Images)
“The company is implementing various measures to reduce selling, general and administrative expenses, reduce cost of goods sold, balance its asset portfolio, and prioritize spending and investment in research and development,” Nissan said in a statement at the time.
Reuters and FOX Business’ Elizabeth Pritchett contributed to this report.
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