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The vehicles are offered for sale at a Nissan dealership on December 18, 2024 in Libertyville, Illinois.
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On Monday, Japanese automakers Nissan and Honda announced that they had entered into formal talks to merge and create the world’s third largest car manufacturer by sales.
In a press conference on Monday, Honda CEO Toshihiro Mibe said that the companies needed a larger scale to compete in the development of new technologies in electric vehicles and intelligent driving. A commercial integration would give the companies an “advantage that will not be possible under the current collaboration framework,” Mibe said, according to a translation.
The agreement would aim to share intelligence and resources, but protect both brands, he said.
A holding company would be formed as the parent company of Honda and Nissan, listed on the Tokyo Stock Exchange. The larger Honda will appoint most of the board members of the integrated entity. The merged group has the potential to deliver a turnover of 30 trillion yen ($191.4 billion) and an operating profit of more than 3 trillion yen, he said.
The talks are set to conclude in June 2025.
Nissan’s strategic partner, Mitsubishi, has been offered the possibility to join the new group and make a decision at the end of January 2025.
Companies are faced with intense global competition in the EV market from the likes Tesla and China’s BYD.
The proposed agreement was first reported by the Japanese newspaper Nikkei on the 17th of December.
Nissan shares rose after the initial report. Analysts say the potential link is the result of financial underperformance to the company and of the restructuring of their long collaboration with France Renault.
In its most recent quarterly results, Nissan he said It will cut 9,000 jobs and reduce global production capacity by a fifth.
The carmaker has “struggled in the market, it’s struggled at home, it doesn’t have the right product line,” Peter Wells, professor of business and sustainability at Cardiff Business’ Automotive Industry Research Center School, he told CNBC.Road signs in Europe” last week.
“There are so many warning signs, so many red flags around Nissan at the time that something was going to happen. Whether the answer is another question,” Wells added.
This is a breaking news story and will be updated shortly.
— CNBC’s Sam Meredith contributed to this story.
