Honda and Nissan have confirmed the reports that they plan to merge while building upon existing partnerships.
The two companies announced on Dec. 23 that they had signed a memorandum of understanding (MOU). The two companies will hold discussions regarding the establishment of a joint holding company.
According to a press release, both companies will become wholly-owned subsidiaries of the new joint holding company. The plan is for the joint holding company to join the Prime Market of the Tokyo Stock Exchange (TSE) in August 2026.
If the merger plans move forward, the two companies can reduce costs through several steps. The list includes standardizing the vehicle platforms and integrating Honda’s motorcycle and power products businesses.
Honda and Nissan will also source parts from the same supply chain and share production lines. They will also aim to optimize their manufacturing plants to reduce the fixed costs.
Reducing costs is key for Nissan considering that the company has struggled financially in recent years. The company has already taken steps to reduce costs. This includes CEO Makoto Uchida reducing his salary by 50%. Nissan has also announced plans to restructure its corporate layout.
The press release from Honda also announced that Mitsubishi Motors had signed the MOU. It did not provide details about Mitsubishi’s involvement.
“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future,” Uchida said in a press release.
“If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
This merger between Nissan and Honda continues a partnership that began earlier this year. The two companies signed an MOU in March focused on a strategic partnership. This particular partnership involved the future of electrification and fatality-reducing vehicle technology.