Tokyo: Honda and Nissan were set to announce on Monday that they would begin talks on a merger to help the Japanese giants catch up with Chinese rivals and Tesla in electric vehicles.
Their collaboration will create the world’s third largest automaker, which will expand the development of EVs and self-driving technology, coming to the rescue of struggling Nissan.
The pair have not publicly released any details but it has been widely reported in Japanese media that they will sign the memorandum of understanding on Monday afternoon.
Honda and Nissan – Japan’s number two and three automakers after Toyota – are aiming to finalize a merger deal in June 2025, multiple media outlets said.
Mitsubishi Motors, which could join the new holding company early next year, is also expected to take part in Monday’s announcement, after Honda and Nissan hold board meetings.
In the morning, the presidents of Honda, Nissan and Mitsubishi Motors told the industry and transport ministries of their plans to start talks, Kyodo News reported.
Honda and Nissan’s partnership could include a manufacturing agreement to build vehicles at each other’s plants, Kyodo said, citing sources close to the matter.
Weak consumer spending and stiff competition in many markets are making life difficult for many automakers.
China overtook Japan to become the biggest vehicle exporter last year, helped by government support for EVs.
“We hope that Japanese companies will take steps to respond to these changes and find ways to survive and win amid international competition,” top government spokesman Yoshimasa Hayashi said Monday.
He declined to comment on the merger reports but highlighted the “importance of strengthening competitiveness in areas such as batteries and in-vehicle software”.
Debt-ridden Nissan announced thousands of job cuts last month as it reported a 93 percent drop in first-half net profit, with the merger with Honda welcoming news.
But Taiwanese electronics maker Foxconn is also said to have sensed an opportunity.
Foxconn, which makes equipment for tech companies including Apple’s iPhones, failed for the first time with Nissan in a bid to acquire a majority stake, according to Bloomberg.
A Taiwanese media outlet then said that Foxconn’s Jun Seki – a former Nissan executive – had traveled to France to ask Renault to sell a 35 percent stake in Nissan, although reports later said the pursuit was on hold.
Honda and Nissan had already agreed in March to explore strategic partnerships on software and components for EVs, among other technologies.
The partnership was joined in August by Mitsubishi Motors, of which Nissan is the majority shareholder.
Nissan has endured a tumultuous decade, including the 2018 arrest of former boss Carlos Ghosn, who later jumped bail and fled Japan hiding in a musical instrument box.
Kyodo said Honda will ask Nissan to achieve a “V-shaped recovery” in performance as a condition of the merger.