The global automobile market has been abuzz with significant chatter over the last few days. There were whispers about a possible merger between Japanese automotive giants Nissan, Honda, and Mitsubishi. Finally, quashing all speculations, the three companies have announced their decision to come together and have signed a Memorandum of Understanding (MoU) for a joint holding company. Their unified aim is to create the largest car company.
30 Trillion Yen Target:
The merger is targeting an annual revenue of 30 trillion yen (approximately 16.30 trillion INR) and an operating profit exceeding 3 trillion yen (1.62 trillion INR). The plan is to finalize discussions by June 2025, with the holding company expected to be operational by August 2026. Upon inception, Honda and Nissan’s shares will be delisted in July and August 2026, with plans to relist them on the stock exchange later.
Source: aajtak
Together, Honda, Nissan, and Mitsubishi plan to annually manufacture approximately 8 million vehicles, making them capable of challenging global giants like Toyota Motor Corporation and Volkswagen AG. Honda, as the largest company in this venture, will have a significant impact, providing substantial support to Nissan, which is seeking revitalization.
Focus on New Technologies:
Once established, this joint holding company is set to transform the global automobile industry. Positioned alongside dominant players like Toyota and Volkswagen, Honda-Nissan will get an opportunity to strengthen its presence. This collaboration will focus on developing new technologies, vehicle platforms, and designs.
With research, development, and operations consolidated, vehicles can be manufactured at reduced costs, benefiting not only vehicle pricing but improving profitability. Work on next-generation Software Defined Vehicles (SDVs) with new technology will also be undertaken.
Nissan and Honda have announced their intentions to start a joint holding company via a mutual share transfer, which will become the parent company of both entities. This decision will be finalized after discussions with respective shareholders at annual meetings. The companies are consulting relevant authorities for permission and have released a timeline plan for this endeavor.
Nissan's Director, President, and CEO, Makoto Uchida, stated: "Honda and Nissan have initiated considerations for a business integration. Research will explore synergies in several areas between the companies. We hope this plan, if successful, will yield great results."
Meanwhile, Honda's Director, Toshihiro Mibe, commented, "In this transformative period for the automobile industry, occurring once every century, we expect that Mitsubishi Motors' participation in the Honda-Nissan business integration will significantly bolster our efforts. We are optimistic about establishing a robust joint venture."
Mitsubishi Motors' Director, President, and CEO, Takao Kato, expressed his belief, stating: "Amidst this era of change within the automotive industry, we are confident that business integration between Nissan and Honda will succeed, benefitting allied businesses, including Mitsubishi Motors."