Rumors of a merger between two major players in the Japanese automotive industry have resurfaced!
According to Nikkei News, Honda and Nissan have entered into merger negotiations to better cope with the rapidly changing global automotive industry. According to informed sources, Honda and Nissan are considering forming a holding company and are expected to sign a memorandum of understanding in the short term. As for the shareholding ratio and other related details of both parties in the new company, they will be determined later.
After the announcement, the stock prices of Nissan and Mitsubishi soared. As of press time, Nissan rose 23.7% and hit the daily limit up, Mitsubishi rose over 19%, and Honda fell over 3%.
Transaction details
According to Nikkei News, Honda and Nissan also plan to include Mitsubishi Motors in the holding company system. Currently, Nissan is the largest shareholder of Mitsubishi Motors, holding 24% of the company's shares.
If Nissan Honda Mitsubishi were to merge, the new company's annual car sales would exceed 8 million units. This will make the company one of the world's largest car manufacturers, but still lower than another Japanese car manufacturer Toyota (with sales of 11.2 million vehicles in 2023) and German car manufacturer Volkswagen (with sales of 9.2 million vehicles last year).
In response to this report, Honda stated that it was not content released by Honda. Honda emphasized that as announced in March and August this year, Honda, Nissan Motor Co., Ltd., and Mitsubishi Motors Corporation will jointly discuss various possibilities for future cooperation based on their respective strengths. No decision has been made yet, including the content reported by the media. If there are any updates, stakeholders will be informed at an appropriate time.
Mitsubishi Motors stated that media reports about a possible merger between Nissan and Honda are not based on any company announcements.
There were signs of the merger between the two companies before. Honda's Executive Vice President Shinji Aoyama has revealed that Honda is indeed considering various options, including the possibility of merging with Nissan. He said that both parties are indeed considering establishing a holding company to operate. This move aims to integrate each other's resources and compete more effectively with other car companies in the fiercely competitive automotive industry.
In March 2024, Honda and Nissan announced their collaboration on electric vehicle batteries and software, planning to jointly explore the next generation of software defined automotive platforms, share resources such as motors and inverters, and jointly develop new batteries and electric axles; In August, Honda, Nissan, and Mitsubishi Motors signed a memorandum of understanding to jointly explore the potential for cooperation in areas such as vehicle electrification and software development.
If this merger is successful, it will become the largest acquisition in the automotive industry since the merger of Fiat Chrysler Automobiles and PSA Peugeot Citroen in January 2021 to form Stellantis.
Nissan and Mitsubishi's stock prices soar
After the news came out, the stock prices of Nissan and Mitsubishi soared. As of press time, Nissan rose 23.7% and hit the daily limit up, Mitsubishi rose over 19%, and Honda fell over 3%.
Public information shows that Honda, Nissan, and Mitsubishi Motors are all leading car companies in the Japanese automotive industry. Since its establishment in 1948, Honda's business has spanned multiple fields such as automobiles and motorcycles; Nissan Motor Co., Ltd. was established in 1933; Mitsubishi Motors became independent from Mitsubishi Heavy Industries in 1970 and is a core member of the Mitsubishi Group. In the fiscal year 2023 (April 2022 to March 2023), Honda sold approximately 3.98 million vehicles worldwide; Nissan's global sales for the 2023 fiscal year are 3.37 million vehicles; Mitsubishi Motors has 780000 vehicles.
But in the Chinese market, the growth of Japanese brand cars is facing huge challenges. From January to November 2024, Honda's cumulative sales in China decreased by 30.7%, while Nissan's decreased by 10.5%.
Both companies' stocks also performed poorly. Nissan fell 24% this year, while Honda fell 11% this year.
Affected by the sluggish business, Nissan announced in November that it would reduce global production capacity by 20% and initiate layoffs equivalent to nearly 10% of the total workforce of 9000 people. The formulation of integration measures has become a top priority. Nissan believes that in order to regroup, it is necessary to deepen its relationship with Honda.
