Shock And Awe: Honda And Nissan Considering Merger

As 2024 comes to a close, a thunderclap has hit the automotive industry, pushing Nissan into the arms of Honda as the two Japanese automakers reportedly are talking about a merger. We can guarantee at the beginning of the year just about nobody was expecting this, yet here we are as the whole landscape in the industry starts shifting dramatically.

Foreign automakers aren’t doing so well in the Chinese market.

We’ve heard rumors for a few years now that Honda would be a prime target for a hostile acquisition. And for a while there the company’s alliance with General Motors looked like it could turn into something more. Now with Nissan on the ropes financially, it seems the two might have decided they’re better off together.

The two automakers earlier this year announced a strategic partnership, which really didn’t catch that much attention. To be honest, car companies enter into those sorts of agreements all the time, like when Toyota and Tesla buddied up, and they often don’t last long or result in all that much. But this time it looks like the result could be huge.

News of the two companies beginning merger talks was broken by CNBC in shocking report, which is based of a Nikkei newspaper report in Japan. Allegedly, the possible plan might involve a holding company to manage operations, bringing Mitsubishi into the merger as well.

If this deal goes through, the conglomeration would be one of the largest automakers in the world with global sales roughly equating 8 million units annually (Toyota sold just over 11 million in 2023). However, bigger doesn’t always mean better, just ask Stellantis about that.

The fact that CNBC reached out to Nissan and Honda about the merger news and both automakers didn’t flatly deny it speaks volumes. Likely something’s going on between the two, even if the details of a potential merger aren’t entirely accurate.

Just like CNBC points out, there are some in the automotive industry who think companies should be merging or large ones should be gobbling up smaller ones at a rapid pace to act as a bulwark against the onslaught of Chinese automakers.

We, on the other hand, are fans of diversity of choice in open markets, not an oligopoly where consumers have few options, essentially corralling them into decisions made by companies which act more like a cartel than competitors. The possibility of the auto industry heading in that direction doesn’t excite us one bit.

Image via Honda, Nissan