Honda and Nissan Merge: A New Era for the Auto Industry

Honda and Nissan plan a merger to form the world's third-largest automaker, targeting $191 billion in sales. Talks conclude in 2025, with a holding company by 2026. This move addresses challenges from Tesla and Chinese automakers. Mitsubishi's integration boosts global sales above 8 million cars annually.

In a landmark decision unveiled on Monday, Honda and Nissan have embarked on discussions to merge, setting the stage to create what could become the world's third-largest automaker. This ambitious initiative signifies a major transformation in an automotive industry currently enduring significant upheaval.

The prospective merger aims to achieve combined sales of 30 trillion yen, translating to approximately $191 billion, alongside an operating profit exceeding 3 trillion yen. The talks are expected to reach a conclusion by June 2025, with the establishment of a joint holding company anticipated by August 2026. Upon completion, shares for both companies will be delisted.

The union of these iconic Japanese brands forecasts a shift akin to the merger of Fiat Chrysler Automobiles and PSA, forming Stellantis in 2021. Success in this venture would elevate the group's global car sales beyond 8 million annually, propelled further by Mitsubishi's inclusion. Meanwhile, both Honda and Nissan are tackling challenges from evolving market dynamics, particularly in electrification and innovative software, amidst competitive pressure from Tesla and Chinese automotive rivals.

(With inputs from agencies.)