Honda and Nissan set out holding-company plan as Japanese automakers seek greater scale

Companies target an August 2026 structure

Honda and Nissan signed a memorandum of understanding outlining a possible combination under a joint holding company, setting an August 2026 target for establishing the new structure. The plan announced on December 23, 2024, could also encompass Mitsubishi Motors, a smaller member of Nissan’s alliance.

Honda president Toshihiro Mibe and Nissan president Makoto Uchida signed the preliminary agreement. Based on the companies’ production, the resulting group could rank as the world’s third-largest automaker, behind Toyota and Volkswagen. Mibe said Honda would initially take the leading role in managing the combined entity.

The proposal emerged as Japanese manufacturers sought to reduce costs and strengthen their position in electric vehicles. Honda, Nissan and Mitsubishi had already announced in August that they would share EV components, including batteries, and conduct joint research into autonomous-driving software. Together, the three manufacturers would produce roughly 8 million vehicles. In 2023, Honda made 4 million, Nissan produced 3.4 million and Mitsubishi built slightly more than 1 million.

Their combined market capitalization would put the group’s value above $50bn, based on the three companies’ valuations at the time. Honda was valued at more than $40bn, while Nissan’s valuation was about $10bn.

The talks carried particular significance for Nissan, which had been struggling since former chairman Carlos Ghosn was arrested in 2018 on allegations of fraud and misuse of company assets. Ghosn denied the accusations and later fled to Lebanon after his release on bail. Speaking to reporters by video on the day of the announcement, he criticized the proposed transaction as a “desperate move.”

Nissan had announced a substantial retrenchment in November. The company said it would eliminate 9,000 positions, equal to 6% of its worldwide workforce, and lower global production capacity by 20%. Those measures followed a quarterly loss of 9.3 billion yen, reported as approximately $60m.

Honda was Japan’s second-largest automaker and was widely regarded as the only domestic partner capable of supporting Nissan through its difficulties. At the same time, a combination offered Honda access to capabilities developed by Nissan. Sam Fiorani, vice president of forecasting firm AutoForecast Solutions, said Nissan’s work in battery production, electric cars and gasoline-electric hybrid systems could assist Honda as it developed its own electric vehicles and next-generation hybrids.

If completed, the integration would represent a major restructuring of two longstanding Japanese automotive brands as the global industry shifted away from fossil fuels. Its scale was compared with the 2021 combination of Fiat Chrysler Automobiles and PSA, which created Stellantis through a transaction valued at $52bn. The memorandum established the companies’ intended direction and timetable, while the evidence described the holding company as a projected outcome rather than a completed merger.