Honda, Nissan Begin Merger Talks, MoU To Be Signed Soon: Report

Honda and Nissan have reportedly initiated talks on a possible merger. As Bloomberg cites Nikkei, the organisation will eventually encompass Mitsubishi Corporation. Once the brands sign the MoU, the automakers will form a single holding company to compete against one of the largest automakers in the world, Toyota Motor Corp. The partnership will also benefit both automakers in competing against other larger rivals.

The reports of the Nissan and Honda partnership started emerging after both brands diluted their partnership with other global automakers i.e., Honda's partnership with GM and Nissan with Renault. Once the deal is through, the automakers will come together to support each other in software development and electric vehicle batteries.

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Addressing the reports on the discussion of the merger, Honda told news agency AFP, "We are discussing possibilities for cooperation between Honda and Nissan in the future, in a wide range of fields and in various areas, and those possibilities include the latest reports, but there is nothing decided."

Clarifying on the reports Nissan spokesperson has issued a statement saying, "The content of the reports that Honda, Nissan and MMC are considering a business integration is not based on an announcement from our company. As announced in March and August of this year, Nissan, Honda, and MMC are considering various possibilities for future collaboration including the content of the report, but no decisions have been made. If there are any updates, we will inform all stakeholders at the appropriate time."

It is to be noted that Honda and Nissan agreed to explore a "strategic partnership" on electric vehicles, as per an announcement in March. Experts believed that the move was aimed at giving the brands a relatively stronger position against Chinese rivals.

In May, Honda announced its intention to increase its investment in electric vehicles to $65 billion by 2030, as part of an ambitious goal set three years prior to achieve 100 percent electric vehicle sales by 2040. Nissan, which cut 9,000 jobs in November and lowered its annual sales forecast, indicated in March that 16 out of the 30 models it plans to introduce over the next three years will be "electrified."