NEW DELHI: Japanese auto giants Honda and Nissan have announced plans to merge operations, creating the world’s third-largest automaker by sales, trailing only Toyota and Volkswagen.
The two stated on Monday that they had signed a memorandum of understanding (MoU) to explore the integration of their businesses. Nissan’s alliance partner, Mitsubishi Motors, has agreed to participate in the discussions.
In India, where both Honda and Nissan have a major presence, the alliance is likely to have an impact. Nissan is already part of an existing alliance with French automaker Renault, making this collaboration even more significant for the global and Indian carmakers.
This move comes as traditional automakers face pressure from emerging Chinese manufacturers and Tesla, which have made major strides in the electric vehicle market. By combining resources and expertise, Honda, Nissan, and Mitsubishi aim to strengthen their position in an evolving industry dominated by the push for EVs and advanced technologies.
In a statement, the two companies said that the MoU is aimed to serve as an option to maintain global competitiveness and for the two companies to continue to deliver more attractive products and services to customers worldwide.
If the business integration can be realised, both companies can aim to integrate their respective management resources such as knowledge, human resources, and technologies; create deeper synergies; enhance the ability to respond to market changes; and expect to improve mid- to long-term corporate value, the statement said. Realising the synergies from integration, Nissan and Honda aim sales revenue exceeding 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen.