Honda, Nissan, Mitsubishi Merger To Form Third-Largest Automaker

Honda, Nissan and Mitsubishi are merging under one holding company, signaling a significant change in the automotive industry. In a joint statement, Honda and Nissan announced the strategic alliance to face growing competition in the global auto market. 

The merger, expected to be completed by August 2026, will make the three companies the world's third-largest automaker, behind Volkswagen AG and Toyota.

The Purpose of the Merger

Once the merger is complete, the three brands will share vehicle platforms and release new models more quickly. They will also work together on research and development for new technologies and share production lines and parts sourcing to reduce manufacturing costs. 

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However, it remains to be seen if this will give the new group a competitive edge against younger companies like Tesla and BYD, which offer a wide range of electric vehicles (EVs). While Honda and Nissan are currently performing well in the US, their EV portfolios are lacking. This could be a problem in the near future, as it's expected that EVs will make up 40% of all global car sales within the next five years.

The press statement doesn't provide much information about Mitsubishi's future. We also don't know yet how the partnership will affect customers' experience.

Honda Director and Representative Executive Officer Toshihiro Mibe, said, “We are still at the stage of starting our review, and we have not decided on a business integration yet."

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Nissan Director, President and CEO Makoto Uchida, is optimistic that the merger will lead to compelling new products, saying, "Together, we can create a unique way for them to enjoy cars that neither company could achieve alone."

Nissan's profits have dropped in North America due to its outdated product lineup, especially the lack of appealing hybrid models. However, Honda is more optimistic.

Honda aims to sell 1.3 million hybrids annually by 2030, doubling the 650,000 it sold outside China in 2023. To achieve this, Honda plans to introduce two updated vehicle production platforms and two more efficient and profitable gas-electric powertrains starting in 2026.

Nissan’s dealer network in the US is struggling, with nearly 40% of its 1,000 showrooms reporting losses in the first half of the year due to unsold cars sitting in lots. The arrival of new hybrids from Honda could help address this issue.

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