Honda (HMC) and Nissan (NSANY) are set to merge by 2026, aiming to create the third-largest global automaker, following Toyota (TM) and Volkswagen (VWAGY). The deal is a direct response to the growing competition from Chinese electric vehicle (EV) makers like BYD (BYDDF) and Tesla (TSLA), who have been rapidly gaining market share. “The rise of Chinese automakers and new players has changed the car industry quite a lot,” said Honda CEO Toshihiro Mibe.
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Merging for Scale and Survival
This merger would allow Honda and Nissan to pool resources and tackle the shift towards electrification and autonomous driving. The combined entity expects to generate $191 billion in sales and over $3 billion in operating profit. However, despite the scale, Mibe clarified, “This is not a rescue of Nissan.” While Nissan has struggled in markets like China and the U.S., Honda sees the merger as an opportunity to compete with the rising tide of global EV manufacturers.
Mitsubishi Could Join the Deal
Mitsubishi Motors (MUFG), which is partly owned by Nissan, is also thinking about joining the merger talks. If Mitsubishi decides to jump in, the new group could hit over 8 million in global sales, beating Hyundai and Kia. They plan to make a decision by the end of January, and if Mitsubishi joins, it could give the group a bigger edge in key markets. It would also help the merged company compete better with big players like Tesla and BYD.
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