Nissan and Honda, two big car companies from Japan, have announced an agreement to look into merging their businesses by creating a joint holding company.
The deal to create a joint holding company comes after the two companies signed an earlier deal in March 2024 to work together on goals like being environmentally friendly and reducing traffic deaths. They also agreed in August to team up to develop new software for future vehicles. The goal of this new proposal is to boost their competitiveness globally. Mitsubishi Motors may also join in, but its participation is still up in the air until January 2025.
Keep in mind that while it sounds like a merger, it’s not yet. This just confirms that Nissan and Honda have signed a memorandum of understanding (MOU) to explore potential business integration. This means they are beginning discussions and due diligence to determine the feasibility and terms of a possible merger. There is no guarantee that a merger will actually happen. This MOU is the companies agreeing to get to know each other better and explore a possible future together. Nissan and Honda are seeing if a merger would be beneficial and what form that merger might take.
There’s nothing much here for Honda or Nissan vehicle owners to worry about, at least not yet. The strategy is meant to combine management resources like knowledge, staff, and technology. The new company expects to use the strengths of both organizations’ car operations and Honda’s motorcycle and power products to boost Japan’s industry and become a top global mobility company.
Merging the two companies could lead to big savings using the same vehicle designs for different products. This would improve product quality and lower both development and production costs, making investments more efficient. The companies claim that merging their research and development teams is likely to speed up technology innovations and save money, but we’ll have to wait and see if that’s true.
The plan for the business integration includes signing a final agreement by June 2025.
Source: Honda