Honda & Nissan Merge to Create World’s Third Largest Auto Manufacturer

Japanese automakers Honda and Nissan have decided to merge their businesses to create the world's third-largest automaker. The companies signed a memorandum of understanding (MoU) today. However, the announcement marks a significant shift in the industry, as the merger prompts a shift from fossil fuels to embrace electrification.

Mitsubishi also joined the alliance to integrate its business with Honda and Nissan. If the alliance finalisies, the group would just be behind Toyota and Volkswagen in global vehicle sales. This will also pave the way for the group to compete with Tesla and Chinese electric vehicle (EV) manufacturers.

Based on the current market capitalisation of the three automobile manufacturers, the merger would create a combined entity worth $50 billion.

Notably, the trio is expected to produce 8 million vehicles on an annual basis. Toyota is Japan’s largest automaker producing close to 11.5 million vehicles in 2023. While Honda produced 4 million vehicles last year, Nissan and Mitsubishi Motors accounted for 3.4 million units and 1 million respectively.