It’s perhaps one of worst-kept secrets in the automotive industry at the moment, but it’s still a shock nonetheless: Honda and Nissan have officially begun talks to join forces, with Mitsubishi possibly joining at some point. Today the three Japanese carmakers announced that they have signed a memorandum of understanding (MOU), “to advance discussions among the three companies.” This is on top of the feasibility study for collaboration that was signed back in March.
Honda cites the potential for synergy was ‘greater than anticipated’ in the fields of technology, research, and development. Honda and Nissan are aiming for a greater value proposition should the partnership prove a success.
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Why the shock announcement? Per Toshihiro Mibe, president of Honda Motor Corporation, the signing of the MOU was made to accelerate talks between them and Nissan. To move things forward, a new holding company will be made for the Honda-Nissan partnership. As Japan’s second-largest automaker, Honda will be the majority shareholder given its financial health.
Some examples of synergies were mentioned during the joint announcement. It’s unknown if all will push through, but it opens up the possibility of platform sharing and greater collaboration between electrification projects (e-Power, e:HEV, etc). Mibe also acknowledged the growing presence of Chinese automakers, hence the need for stronger partnerships and strengthening manufacturing and supply chains.
“At a time of once-in-a-century transformation in the automotive industry, we hope that by joining the discussions on a business integration between Nissan and Honda, Mitsubishi Motors will be able to further lead social change towards our goal of becoming a leading company in creating new value in the field of mobility through our business integration,” added Mibe.
But the success of this venture will greatly depend on how Nissan can quickly turn things around. Honda needs Nissan to ‘stand on its own’ to move forward with the partnership. Should the latter fail, the collaboration will be halted.
“Honda and Nissan have begun discussions toward a business integration and will explore how the two companies can create significant synergies in a wide range of fields. It is highly significant that Mitsubishi Motors, Nissan’s partner, is participating in these discussions, and if the integration is realized, I expect we will be able to deliver even greater value to even more customers,” said Makoto Uchida, president and CEO of Nissan Motor Corporation.
The topic of filling up gaps between segments was also brought up. While not explicitly mentioned, Nissan and Mitsubishi can help Honda with commercial vehicles while Honda can expand Nissan and Mitsubishi’s passenger car range.
Speaking of Mitsubishi, where are they in all this? The company is still ‘undecided’ if it should join the cooperation. The said, it’s ‘open to discussion’ and will make a final decision by January 2025. A new MOU will be made should Mitsubishi say yes.
Takao Kato, president and CEO of Mitsubishi Motors Corporation, commented: “The automotive industry is in a period of transformation, and I am convinced that the initiation of discussions on the integration of our two companies will maximize synergies, and I expect that our collaboration will also bring great value. We will begin to consider as soon as possible what the best form of integration would be to leverage the strengths of the three companies.”
Once all players are on board, whether with Mitsubishi or not, more details will be shared by mid-2025. By Honda’s estimates, there is a strong chance of producing 7.5 million units per year should all plans fall into place.
