Honda Motor and Nissan Motor, Japan’s second- and third-largest automakers, are discussing ways to deepen their ties, including the possibility of a merger that could fundamentally restructure Japan’s car industry.
The merger talks between the two storied Japanese giants highlight the intense upheaval within the world’s auto industry, as carmakers grapple with expensive technological shifts, political instability and the rise of fast-growing Chinese rivals.
Though discussions are still at an early stage, the thinking at Nissan and Honda is that combining forces could provide the companies with the resources and scale necessary to navigate those
immense pressures.
Last year, Honda sold 3.98 million vehicles and Nissan 3.37 million. Their combination could make them the world’s third-largest automaker group, behind their Japanese rival Toyota Group, which sold 11.23 million vehicles last year, and Volkswagen Group of Germany, which sold 9.23 million.
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Honda and Nissan began collaborating this year on the development of electric vehicles. Over several months, their discussions have expanded to include the potential creation of a new company under which both automakers would operate, according to two people familiar with the matter who were not authorized to speak publicly.
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Nissan and Honda are expected to sign a memorandum of understanding within the next week to formally begin discussions of partnership-broadening steps, including the details of a potential merger, the people familiar with the matter said. No final decisions have been made, they said.
The companies said in statements that they were in talks. “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” they said. “We will inform our stakeholders of any updates at an appropriate time.”
The possibility of merging forces would have been largely unthinkable for two Japanese titans of auto making just a decade ago. The talks underscore the level of churn in the industry as manufacturers move away from the internal combustion engine, which has powered the vehicles they have produced for most of the past century.