Jakarta, Indonesia Sentinel — Honda and Nissan have officially announced for merger plans in 2026, marking a historic shift in Japan’s automotive industry as it grapples with mounting competition from China’s electric vehicle (EV) manufacturers.
Reported by CNBC Indonesia, the merger was announced on Monday, December 23, as the two companies has signed a Memorandum of Understanding (MoU) on August 1, 2024. The MoU outlining a strategic partnership focused on artificial intelligence and vehicle electrification.
The agreement aims to drive joint research into next-generation Software-Defined Vehicle (SDV) technology, a crucial component for the future of mobility. According to the MoU, both automakers will collaborate across multiple vehicle categories, including Internal Combustion Engine (ICE), Hybrid Electric Vehicle (HEV), Plug-in Hybrid Electric Vehicle (PHEV), and fully Electric Vehicle (EV) segments.
“Today marks a significant moment as we begin discussions on a potential business integration that could shape our future. If realized, I am confident that by combining the strengths of both companies, we can deliver unparalleled value to customers worldwide,” said Makoto Uchida, President and CEO of Nissan, in an official statement, as reported by CNBC Indonesia.
World’s Third Largest Automotive Group
The merger is poised to create the world’s third-largest automotive group by vehicle sales, trailing only Toyota and Volkswagen. This consolidation would allow both companies to scale operations and pool resources, enhancing their ability to compete against agile competitors such as Tesla and China’s BYD.
The union of Honda, Japan’s second-largest automaker, and Nissan, the third-largest, represents the most significant shift in the global automotive landscape since Fiat Chrysler Automobiles merged with PSA Group in 2021 to form Stellantis.
Mitsubishi Motors, in which Nissan holds a major stake, is also reportedly considering joining the merger and is expected to make a final decision by the end of January.
During a joint press conference in Tokyo, executives from Honda, Nissan, and Mitsubishi discussed trends in electrification and autonomous driving technologies. “The rise of Chinese automakers and new industry players has significantly transformed the automotive landscape,” said Honda CEO Toshihiro Mibe, as reported by Reuters. “We must build the capabilities to compete with them by 2030, or we risk falling behind.”
Capture Broader Market
The combined entity aims for annual sales of 30 trillion yen ($191 billion) and an operating profit exceeding 3 trillion yen. The companies expect to finalize merger discussions by June 2025 and establish a holding company by August 2026, at which point their shares will be delisted.
Honda, with a market capitalization exceeding $40 billion—roughly four times that of Nissan—will appoint a majority of the new company’s board members.
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If Mitsubishi Motors joins the alliance, the group’s annual global sales could surpass eight million vehicles, potentially overtaking South Korea’s Hyundai as the world’s third-largest automaker.
Honda and Nissan had already been exploring collaboration opportunities, including joint efforts in electrification and software development. In August, the partnership was extended to include Mitsubishi Motors, signaling a broader alignment among the three automakers.
Through this merger, Honda and Nissan aim to not only strengthen their global competitiveness but also contribute to industrial base across both fuel and electric vehicle, reflecting Honda and Nissan longstanding presence in the automotive industry.
(Raidi/Agung)
