Japanese automakers Honda and Nissan have announced plans to join forces and form the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.
The two companies said they had signed a memorandum of understanding on Monday and that smaller Nissan alliance member Mitsubishi Motors also had agreed to join the talks on integrating their businesses. “We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base,” Nissan’s CEO Makoto Uchida said in a statement.
Automakers in Japan have lagged behind their big rivals in electric vehicles and are trying to cut costs and make up for lost time.
News of a possible merger surfaced earlier this month, with unconfirmed reports saying that the talks on closer collaboration partly were driven by aspirations of Taiwan iPhone maker Foxconn to tie up with Nissan
A merger could result in a behemoth worth more than $50 billion based on the market capitalization of all three automakers. Together, Honda and the Nissan alliance with Renault SA of France and smaller automaker Mitsubishi Motors Corp. would gain scale to compete with Toyota Motor Corp. and with Germany’s Volkswagen AG. Toyota has technology partnerships with Japan’s Mazda Motor Corp. and Subaru Corp.
Even after a merger Toyota, which rolled out 11.5 million vehicles in 2023, would remain the leading Japanese automaker. If they join, the three smaller companies would make about 8 million vehicles. In 2023, Honda made 4 million and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million.
The world’s top ten largest carmakers in 2023.
| Rank | Vehicles sold | |
|---|---|---|
| 1 | Toyota (Japan) | 10,307,395 |
| 2 | Volkswagen Group (Germany) | 9,239,575 |
| 3 | Hyundai Motor Group (South Korea) | 7,302,451 |
| 4 | Stellantis (Netherlands) | 6,392,600 |
| 5 | General Motors (United States) | 6,188,476 |
| 6 | SAIC (China) | 5,020,000 |
| 7 | Ford Motor Company (United States) | 4,413,545 |
| 8 | Honda (Japan) | 4,188,039 |
| 9 | Nissan (Japan) | 3,374,271 |
| 10 | Suzuki (Japan) | 3,225,359 |
Nissan, Honda and Mitsubishi announced in August that they would share components for electric vehicles such as batteries and jointly research software for autonomous driving to adapt better to dramatic changes centered around electrification, following a preliminary agreement between Nissan and Honda set in March.
Nissan also boasts years of experience building batteries and electric vehicles, and gas-electric hybird powertrains that could help Honda in developing its own EVs and next generation of hybrids, he said. But the company said in November that it would slash 9,000 jobs, or about 6 percent of its global work force, and reduce its global production capacity by 20 percent after reporting a quarterly loss of 9.3 billion yen ($61 million). It recently reshuffled its management and Makoto Uchida, its chief executive, took a 50 percent pay cut to take responsibility for the financial woes. He said Nissan needed to become more efficient and respond better to market tastes, rising costs and other global changes.
Fitch Ratings recently downgraded Nissan’s credit outlook to “negative,” citing worsening profitability, partly due to price cuts in the North American market. But it noted that it has a strong financial structure and solid cash reserves that amounted to 1.44 trillion yen ($9.4 billion). Nissan’s share price also has fallen to the point where it is considered something of a bargain.
On Monday, its Tokyo-traded shares gained 1.6 percent. They jumped more than 20 percent after news of the possible merger broke last week. Honda’s shares surged 3.8 percent. Honda’s net profit slipped nearly 20 percent in the first half of the April-March fiscal year from a year earlier, as sales suffered in China.
The big surprise for me is that Honda is so far behind Toyota and behind Ford. I always thought Toyota and Honda were on the same level.
They are when it comes to reputation for reliability. But for business sales perspective, that’s different
Honda also produces a lot of things that are not cars, like motorboat engines.
I propose that the merged company should be called “Nihon”.
Nah, what about: Hossain?
Suzuki’s quarterly report: Suzuki became the 9th largest car maker in the world up from a previous double digit position.
and the shareholders go WILD!!!
Are we going to call them NiShonda or Hondissan?
NiHon
wait…
Nida one.
Nida is a great name. Also, it’s a nice but very expensive beach resort in Lithuania.
Can’t wait to buy my first Unilever vehicle.
What surprises me the most is that China is gnawing at the heels of the biggest US automaker.
And that America ranks so low on the list.
America killed its own automotives industry and was further killed by Japan’s so it’s not very relevant globally anymore, meanwhile China is actively working on developing its own automotives industry. It was a matter of time really.
Also, your export market is pretty low, a lot of American stuff doesn’t meet eu/uk standards, or is just plain too big for over here. You can get Toyotas, and parts for them, pretty much everywhere outside of Antarctica
Our take on capitalism has no incentive to change. No one is competing anymore; they’re just colluding and controlling, oligarchs buying up any competition. We’re dragging them kicking and screaming into EV.
Same with Temu and Alibaba. We don’t even try to compete and make anything locally.
They have a population of 1.5 billion people. Big market.
Never heard Stellantis before. We don’t have those cars…
Stellantis is Citroen, Chrysler, Dodge, Fiat, Opel, and Peugeot
And Jeep
Then we have them of course. :)
They don’t sell cars under the company name, only the individual brands.
I had no idea that Hyundai was so large.
Sucks for Suzuki, lol. Unless they manage to nab a bunch of those laid off employees and increase production.
I wonder how much of this is due, or is spurred on, regardless of the publicly stated corporate slop, pressure from their government as they are ramping up military production in hopes of making a Chinese attack cost more than it’s worth.
