Here’s what a Honda-Nissan merger could mean for the auto industry and consumers

Honda and Nissan agreed to consider a merger that would create the world’s third-largest automaker by sales.

The Japanese companies signed a memorandum of understanding on Monday, and Mitsubishi Motors Corp. had agreed to participate in discussions about combining their businesses.

What will the merger mean for the automotive industry?

Japanese automakers have fallen behind major rivals in electric vehicles and are now trying to cut costs.

Nissan, Honda and Mitsubishi announced in August that they will share electric vehicle parts such as batteries and research software for autonomous driving to better adapt to dramatic changes in the auto industry.

RELATED: Nissan, Honda announce merger plans that would create world’s no. 3 car manufacturer

A merger could result in a group worth over 50 billion dollars. Honda, Nissan and Mitsubishi could compete with Toyota Motor Corp. and with German Volkswagen AG. The Associated Press reported that Toyota has technology partnerships with Japan’s Mazda Motor Corp. and Subaru Corp.

The Associated Press reported that Nissan has experience building batteries and electric vehicles and gas-electric hybrid powertrains that could help Honda create its own electric vehicles and next-generation hybrids.

What does this mean for consumers?

The possible merger of the automakers could affect consumers looking for a new car.

According to Car Edgean online car buying service, Nissan can offer customers car incentives such as cash rebates and affordable leases on remaining 2024 vehicles and new 2025 model cars.

However, Honda’s car prices are not expected to change unless the merger with Nissan significantly changes their business strategy.

If Mitsubishi is included in the merger with Nissan and Honda, the automaker could have significant changes, possibly eliminating less competitive car models from its inventory.

In addition, says Brian Moody, managing editor at Autotrader and Kelley Blue Book FOX Business that this deal affects consumers from the point of view that he could see the value in smaller, cheaper electric cars that come from the merger.

“I could even see a merger or partnership like this resulting in a low-cost sub-brand,” he said. “Because that’s what we’re hearing is that a lot of people, a lot of consumers, are saying, ‘You know, new cars are just too expensive. I can’t buy a new car.'”

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