Honda and Nissan: Revving Up for a $54 Billion Auto Merger

Honda and Nissan are exploring a possible merger to combat increasing competition from EV manufacturers like Tesla and BYD. The merger would form a $54 billion auto powerhouse as both companies face financial and strategic challenges. Talks include forming a holding company and deeper collaboration.

In a pivotal move for Japan's auto industry, Honda and Nissan are reportedly exploring a merger that could result in a $54 billion automotive giant. Such a merger would make the combined entity the world's third-largest auto group, as the companies strive to counter competition from Tesla and Chinese manufacturers.

Strained by declining profits and growing competition, Nissan is seeking closer collaboration with Honda, which itself is navigating cash flow issues. Potential plans include forming a holding company and collaborating with Mitsubishi Motors to create a stronger domestic rival against industry leader Toyota.

Although no formal deal has been announced, a joint news conference in Tokyo is anticipated. Analysts predict that while the merger could face scrutiny, it might ultimately fortify Japan's automotive landscape against foreign competition.

(With inputs from agencies.)