Honda and Nissan have announced plans to merge as the Japanese automakers struggle with competition from rival brands in the electric vehicle market.
The two companies confirmed on Monday that they had signed a memorandum of understanding that would create the third largest car maker by sales, behind Toyota and Volkswagen. Nissan alliance member Mitsubishi Motors is also in talks with Honda and Nissan to join the integration, with a decision expected by the end of January. Based on the market capital of all three companies, a finalized merger could result in an entity worth more than 50 billion dollars.
The proposed merger was initially teased last week, and aims to establish a joint holding company to tackle growing global competition from brands like Tesla and China’s BYD in the EV market. The deal would also help to rescue the struggling Nissan, which saw its net earnings in mid-2024 fall by more than 90 percent year over year, and announced plans in November to lay off thousands of workers.
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