Major automakers Honda, Nissan, Mitsubishi announce merger talks, potentially creating world’s third-largest auto manufacturer

Cairo – December 24, 2024: Japanese automakers Honda and Nissan have revealed they are in discussions regarding a potential merger, which could result in the creation of the world’s third-largest automaker by sales.

The companies intend to reach a formal merger agreement by June 2025, with plans to list the new holding company on the Tokyo Stock Exchange by August 2026, according to a joint statement.

This historic merger, which also includes smaller automaker Mitsubishi Motors, aims to consolidate their operations under a joint holding company, positioning the new entity behind only Toyota and Volkswagen in annual vehicle sales.

“Today marks a pivotal moment,” said Nissan CEO Makoto Uchida. “Together, we can create a unique way for customers to enjoy cars that neither company could achieve alone.”

Honda’s President Toshihiro Mibe echoed these sentiments, stating that the merger would retain the principles and brands of each company under a unified leadership.

Auto analyst Adam Jonas of Morgan Stanley highlighted that this merger could signal a broader trend toward consolidation in the industry.

“Legacy auto companies that don’t find new partners must face the prospect of being smaller companies with higher capital expenditures and research costs per vehicle sold,” he noted in a research note last week.

Honda, the largest of the three firms, is expected to take a leading role in the management of the unified entity. Honda’s market value currently stands at £34 billion, significantly higher than Nissan’s £8.4 billion and Mitsubishi’s £3.6 billion. In 2023, Honda sold 3.8 million vehicles, compared to Nissan’s 3 million and Mitsubishi’s 700,000.

In the six months ending September 2024, Nissan’s profits plunged by 94 percent, driven by operational losses and the need for cost-cutting measures, including a 20 percent reduction in manufacturing output and the layoff of 9,000 employees.

Nissan Egypt recently revealed its latest investment contract outlining plans to manufacture a third vehicle model at Nissan’s factories in Egypt and expand the company’s local manufacturing operations. Under the contract, 54 percent of the components used in the third model will be locally sourced, and the company shared that it to reconsider its export strategy for the locally assembled model.

The company has committed $45 million to this project, with an additional $2 million allocated to boost production capacity. By 2025, the combined output of the three models is expected to exceed 30,000 vehicles annually, according to a statement.

Nissan also plans to invest $56 million in the Egyptian market over the next two years and significantly increase exports of locally assembled vehicles. Since August 2022, Nissan has exported 15,000 units of its Sunny model and aims to raise this figure by 50 percent, according to Mohamed Abdel Samad, managing director of Nissan Egypt in an August press release.