Japan’s Honda and Nissan are reportedly to begin merger talks

DETROIT — Japanese automakers Nissan engine and Honda engine reportedly planning to enter into merger talks to better compete in the rapidly changing global automotive industry, Nikkei newspaper reported Tuesday.

Honda and Nissan are considering operating under a holding company and will soon sign a memorandum of understanding, according to the report. They are also looking to eventually bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company.

The combined Nissan-Honda-Mitsubishi business would equal more than 8 million car sales annually, according to the Nikkei. That would place the company among the world’s largest automakers, but still below other Japanese automakers Toyota Motorat 11.2 million in 2023, as well as German car manufacturer Volkswagenwhich last year reported sales of 9.2 million vehicles.

In similar statements, Honda and Nissan neither confirmed nor denied the report: “The reported content was not released by our company,” Honda said. “As announced in March of this year, Honda and Nissan are exploring various opportunities for future collaboration and leveraging each other’s strengths. We will inform our stakeholders of any updates at an appropriate time.”

The merger report follows the two Japanese automakers, who earlier this year entered into a strategic partnership on shared automotive components and software.

Such a merger would be the largest auto industry merger since Fiat Chrysler joined with French-based PSA Groupe to form Stellantis in January 2021.

Auto consultants and other experts have recently called for an increase in mergers and acquisitions to share costs and better compete against rapidly expanding Chinese automakers as well as the U.S. leader in all-electric vehicles Tesla.

US-traded shares of Honda closed up about 1% on Tuesday. Over the counter purchase shares in Nissanwhich is in the middle of a restructuring, jumped more than 11%.