NAIROBI, Kenya- In a move that could reshape the global auto landscape, Honda and Nissan are reportedly in talks to deepen their ties, including the possibility of a full-blown merger.
If successful, the partnership would create a $54 billion powerhouse producing 7.4 million vehicles annually, making it the third-largest auto group globally, trailing only Toyota and Volkswagen.
As electric vehicle (EV) makers like Tesla and Chinese giant BYD shake up the market, legacy automakers are under pressure to evolve or risk obsolescence.
Honda and Nissan have already collaborated on EV development, but Nissan’s recent struggles may have accelerated discussions of a deeper partnership.
Last month, Nissan unveiled a $2.6 billion cost-saving plan, cutting 9,000 jobs and reducing production by 20pc amid slumping sales in the U.S. and China.
This follows an 85pc nosedive in second-quarter profits. Experts see the talks as a lifeline for Nissan while also offering Honda an opportunity to bolster its cash flow and EV strategy.
“This deal seems more about rescuing Nissan, but Honda isn’t without its challenges,” said Sanshiro Fukao of Itochu Research Institute. “Its EV lineup hasn’t exactly been a game-changer.”
A merger wouldn’t just shake up the Japanese auto industry—it would also create a formidable domestic rival to Toyota. However, any such deal is likely to face scrutiny, particularly from the U.S., where President-elect Donald Trump has threatened steep tariffs on imported vehicles. With both Honda and Nissan producing cars in Mexico for U.S. export, concessions may be required to navigate regulatory hurdles.
The ongoing EV price war, sparked by Tesla and BYD, is also pressuring traditional automakers to slash costs and accelerate innovation. Merging resources and expertise could be the ticket for Honda and Nissan to stay competitive.
“This partnership could inject fresh competition into Japan’s auto industry, which has stagnated in recent years,” said Seiji Sugiura, an analyst at Tokai Tokyo Intelligence Laboratory. “Constructive rivalry with Toyota will push the industry forward.”
While a merger might look good on paper, merging two distinct corporate cultures is another story. Honda, known for its tech-centric, powertrain-focused ethos, may find integrating with Nissan’s operations a challenge.
“Honda’s unique culture could resist merging with a faltering competitor,” noted Tang Jin of Mizuho Bank. “The success of any partnership will depend on how well these differences are managed.”
The two companies are reportedly also exploring closer collaboration with Mitsubishi Motors, in which Nissan holds a 24pc stake.
For now, no official deal has been announced, but the talks underscore a shifting auto industry, with legacy players rethinking their strategies to survive in an electrified future.
