Honda and Nissan signed a memorandum of understanding (MOU) for a merger in 2026. This move followed rumours that circulated last year after Nissan’s performance declined significantly. The two companies confirmed these rumours last 23 December 2024, sparking discussions on how this will affect the automotive industry.
Nissan’s slow decline
2024 started off slowly for Nissan, as the automaker reported only a slight improvement in their financial performance from the previous year. Over the course of the last year, the company attempted to recuperate but its sales continued to dwindle. These sluggish financial results pushed the company to make drastic decisions, such as a massive global employee layoff. After promising to become “leaner and stronger,” CEO Makoto Uchida also made the crucial decision to sell 10 of 24 per cent of the company’s stock in Mitsubishi and reacquire stocks previously sold to Renault.
Nissan’s decline in sales is attributed to a lack of innovation, specifically for electric vehicles. The current global market is heading towards EV adoption, especially in the favour of China’s auto companies. This worldwide trend has pushed companies like Nissan to innovate in the same direction but to varying results.
Talks of Nissan-Honda merger
Both Nissan and Honda agreed to continue discussions of a “business integration” by signing an MOU last March 15 2024. Honda’s official announcement was published last December 23, 2024 and detailed the discussions of both parties.
The two organisations initiated these talks “to further accelerate their efforts toward achieving a carbon-neutral society and a zero-traffic-fatality society.” Succeeding memorandums were signed over the course of the year to further talks on the companies’ merging strategies.
The companies are also set to collaborate on “research in fundamental technologies […] for next-generation, software-defined vehicles (SDV).” Nissan and Honda are keen on advancing in these areas to strengthen their joint venture.
Set to be final around the end of this year, both companies are optimistic about this key business decision and may even bring Mitsubishi into the fray. “If [business integration is] realized, […] we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone,” said Uchida.
According to Honda’s Director and Representative Executive Officer, Toshihiro Mibe, the company’s present goal is to finalise a direction for their merger “by the end of January 2025.”
Experts have mixed opinions on this merger, with some predicting optimistic results while disgraced former Nissan CEO Carlo Ghosn slammed this decision in an interview with Bloomberg. Ghosn fled Japan for Lebanon in 2019 following charges of “financial misconduct” during his stint as Nissan’s CEO.
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