Nissan-Honda merger on the horizon - The dawn of a new powerhouse

KUALA LUMPUR: There was a time when Nissan was one of the three biggest automakers in Japan alongside Toyota and Honda. Well, things never stayed the same for Nissan. After reviving from the near bankruptcy situation in 1999, this Japanese automaker is again struggling for survival. This time, Honda came to its rescue.

Yes, the long-standing rumours about Honda and Nissan merger have now been confirmed. The two Japanese automotive firms along with Mitsubishi have signed a memorandum of understanding to begin discussions on a potential business integration. 

The key highlights and potential outcomes of the Nissan-Honda-Mitsubishi MoU are as follows -

• The merger is expected to be finalized by 2025 with all three brands listed under a joint holding company (yet to be named).
• The new joint holding company will be listed on the Tokyo Stock Exchange’s Prime Market by August 2026.
• The merger will strengthen the global competitiveness of all three companies and enable them to offer more appealing vehicles to global customers.
• This unification is expected to produce 8 million vehicles and generate an estimated profit of USD 19 billion (approx RM 85 billion) in a year, making it one of the largest conglomerates in the automotive world.
• By joining hands, Honda, Nissan, and Mitsubishi will be able to share vehicle platforms, reducing their expenses for the development of ICE-powered as well as electrified vehicles.

• The companies will also carry out research and development on the next-generation software-defined vehicle platforms.
• Another benefit of the merger would be optimised manufacturing systems and facilities, resulting in a substantial improvement in efficiency and a reduction in fixed costs.
• Along with that, the companies will also enjoy competitive advantages across the supply chain by simplifying their purchasing process and getting common parts from the same suppliers.
• Other possible advantages include - integrated sales finance functions, increased employee exchanges, and technical collaboration for the development of future products.

Well, the Honda-Nissan-Mitsubishi merger would give rise to a new powerhouse, making it the third largest automotive firm in the world, after Toyota and Volkswagen AG. This alliance would also help the three companies to compete better against growing rivals like Tesla and BYD.

Also read: All-new Honda Prelude more details out; launch next year