Japanese carmakers Honda and Nissan are discussing a merger with Mitsubishi Motors in a bid to counter fierce global competition in the field of electric vehicles, the companies said in a statement released after an emergency press conference on Monday.
Honda and Nissan, Japan’s second and third largest car manufacturers, plan to complete negotiations by June 2025 for a holding company from August 2026, the statement said.
Mitsubishi Motors, which is partly owned by Nissan, is to decide by the end of January whether to participate in a merger, it said.
Nissan and Honda had already announced in March that they would work together in the future on the development of electric vehicles and software technologies in order to reduce their costs and improve competitiveness. Mitsubishi joined these talks in August.
“Honda and Nissan have begun considering a business integration, and will study the creation of significant synergies between the two companies in a wide range of fields,” Honda chief executive Toshihiro Mibe said. “It is significant that Nissan’s partner, Mitsubishi Motors, is also involved in these discussions.”
If the three-way merger goes ahead, the group would become the third-largest carmaker in the world, with combined annual sales of more than 8 million vehicles, rivalling Japanese company Toyota and Germany’s Volkswagen (VW).
The companies said they want to pool their resources to be able to better compete against US carmaker Tesla and Chinese electric vehicle manufacturers. Japanese carmakers have fallen behind globally in this field.
Nissan is struggling in particular in the Chinese market, where its sales have dropped significantly.
The company announced in November that it was cutting around 9,000 jobs worldwide and planned to reduce global production capacities by 20% and reorganize management due to the economic pressure it is facing.
Nissan, which employs around 134,000 people, has also lowered its forecast for the second time this year, revising its targeted operating profit for the current fiscal year from 500 billion yen ($3.2 billion) to 150 billion yen.
Facing similar competition, a number of other car manufacturers and suppliers, including VW, Bosch and Schaeffler, have also announced large-scale job cuts in recent months.