Two big names in Japanese cars have a hunch that they might be stronger together.
What happened: Honda and Nissan are reportedly plotting a merger, per Nikkei Asia, with the two major Japanese automakers looking to form a new holding company that they would both operate under. They have also extended an invite to Mitsubishi to join in on the fun.
- Earlier this year, Honda and Nissan linked up to work on software, batteries, and other EV technologies in order to save money and better compete in China.
Why it matters: More mergers could follow as the rocky road to electrification in the auto industry has created a hospitable environment for consolidation. Legacy automakers are desperately looking for ways to cut costs and compete with Tesla and Chinese EV makers.
- Earlier this year, European carmakers Volkswagen and Renault considered an EV tie-up, while Stellantis (itself the product of a merger) has been on the hunt for acquisitions.
Bottom line: If the merger between Honda, Nissan, and Mitsubishi happens, the company would be bigger than GM, per Bloomberg Intelligence, but still smaller than Hyundai and Toyota. If it doesn’t happen, the future of Nissan will be thrown into serious doubt.—QH