Honda and Nissan to Merge: The Largest Auto Industry Merger by 2026

Honda and Nissan have announced plans to merge by 2026, marking a significant milestone for the Japanese automotive industry. This move aims to strengthen the companies' positions in the face of growing competition from Chinese electric vehicle manufacturers such as BYD, as well as industry giants like Tesla. The merger will allow the companies to share resources and technologies and expand production scale.

The merger of Honda, Japan's second-largest automaker, and Nissan, the third-largest, will make them the third-largest auto group in the world by sales, following Toyota and Volkswagen. The companies aim to achieve sales of 30 trillion yen ($191 billion) and operating profits exceeding 3 trillion yen.

The merger also considers the potential inclusion of Mitsubishi Motors, where Nissan is the largest shareholder. Mitsubishi is expected to make a decision by the end of January. At a joint press conference in Tokyo, the CEOs of all three companies stated that the acceleration of electrification and autonomous driving requires new strategies. According to Honda CEO Toshihiro Mibe, the companies must enhance their capabilities to remain competitive by 2030.

The creation of a holding company is planned for August 2026, after which the shares of both companies will be delisted. Honda, with a market capitalization of over $40 billion, will take on the majority of the board seats in the combined company. With Mitsubishi's potential involvement, the group's total annual sales could exceed 8 million vehicles, placing the Japanese group third globally, after Hyundai and Kia. The market reacted positively to the news: Honda shares rose by 3.8%, Nissan by 1.6%, and Mitsubishi by 5.3% following the merger announcement.