Heaptalk, Jakarta — Nissan Motor Co., Ltd. and Honda Motor Co., Ltd. have officially signed a Memorandum of Understanding (MoU) to initiate discussions on a potential business merger. The collaboration will involve establishing a joint holding company to combine both organizations’ strengths to enhance their global competitiveness and innovation in the automotive sector.
The merger is designed to address key challenges in the industry, including achieving carbon neutrality and eliminating traffic fatalities. By uniting their expertise, Nissan and Honda aim to advance vehicle intelligence and electrification advancements while creating sustainable mobility solutions for a global audience.
“We are still at the stage of starting our review, and we have not decided on a business integration yet. However, to find a direction for the possibility of business integration by the end of January 2025, we strive to be the only leading company that creates new mobility value through a chemical reaction that can only be driven through a synthesis of the two teams,” Honda’s Director and Representative Executive Officer, Toshihiro Mibe, said.
Under the proposed integration, the two companies will perform several strategic measures, including:
Establishment of a Joint Holding Company
- A share transfer will create a joint holding company, the Nissan and Honda parent company.
- The holding company will be listed on the Tokyo Stock Exchange (TSE) by August 2026, while Nissan and Honda will be delisted and become wholly owned subsidiaries.
Integration of Management Resources
- The merger will unify Nissan’s four-wheel vehicle business with Honda’s motorcycle and power products divisions.
- Both companies will share knowledge, technologies, and human resources to create synergies and enhance global competitiveness.
Synergies in Research and Development (R&D)
- Focus on developing next-generation software-defined vehicles (SDVs) through integrated R&D efforts.
- Joint research in fundamental technologies will enhance efficiency, reduce costs, and accelerate innovation in intelligence and electrification.
Standardization of Vehicle Platforms
- By unifying vehicle platforms across product segments, the companies aim to reduce development and production costs while increasing efficiency.
- This will allow for more substantial, diverse product offerings, including ICE, HEV, PHEV, and EV models.
Optimization of Manufacturing Systems
- Manufacturing plants and energy service facilities will be optimized through shared use and streamlined processes.
- The collaboration will improve capacity utilization, significantly reducing fixed costs.
Supply Chain Integration
- Both companies will streamline purchasing operations, sourcing common parts to strengthen supply chain efficiency.
- Collaboration with business partners will further enhance supply chain competitiveness.
Consolidation of Sales Finance Functions
- The sales finance functions of both companies will be integrated to provide comprehensive mobility solutions, including new financial services throughout the vehicle lifecycle.
Talent Development and Collaboration
- Increased employee exchanges and technical collaboration will foster skill development across both organizations.
- The integration will also enhance the ability to attract and retain top talent in the intelligence and electrification sectors.
“Bringing together our resources and expertise is essential to overcoming the challenging shifts in our industry. We aim to create unique mobility value through synergies that only this collaboration can achieve.” Nissan CEO, Makoto Uchida, said.
With these initiatives, the merged entity is expected to achieve annual sales revenue exceeding US$190 billion and an operating profit of over US$19 billion, positioning itself as a global leader in mobility. This merger represents a bold step forward for both companies, combining their strengths to drive innovation, sustainability, and a customer-centric approach in the ever-evolving automotive landscape.