Honda and Nissan have announced the two companies are in merger talks, with the intention of becoming one automaker in 2026 – the third largest in the world.
Nissan has been struggling lately, with sluggish sales and growing debt. Makoto Uchida, Nissan's president and CEO, says it’s in the best interests of both companies to unite.
"I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands,” Uchida said. “Together, we can create a unique way for them to enjoy cars that neither company could achieve alone."
Karl Brauer, executive analyst at iSeeCars.com, says both Honda and Nissan, like most of the global auto industry, are struggling with rising costs, reduced sales, and China’s ever-increasing market share.
“Nissan is also facing a massive debt increase as over $5 billion in bonds come due in 2026, while Honda’s relatively small size limits its ability to invest in electric vehicle development,” Brauer told ConsumerAffairs.
“The two automakers are looking to address these challenges by sharing costs and engineering resources, but successfully merging two companies won’t be easy, and the benefits will take years to manifest.”
Honda Director Toshihiro Mibe the two companies are at the beginning of their discussions and have not yet decided on who the businesses will be integrated But he said both companies offer a lot of strengths.
The industry as a whole may be facing challenges as sales in some sectors have slowed, as consumers push back on rising prices. Some companies that have invested heavily in electric vehicles have faced issues since consumers have not embraced EVs as expected.