Honda, Nissan aim to merge in 2026 as talks kick off, say reports

TOKYO: Honda Motor Co. and Nissan Motor Co. are looking to finaliSe a merger agreement as soon as June after negotiations begin later today, and may combine in 2026, Japanese media reported, citing unidentified sources.

The two automakers plan to create a holding company that would be helmed by a president picked by Honda, Japanese broadcaster NHK said.

A press briefing is expected Monday afternoon after the companies hold board meetings.

The presidents of Honda, Nissan and Mitsubishi Motor Corp. - Nissan’s junior partner - were seen entering and leaving Japan’s transportation ministry this morning, likely to inform officials of their plans to formally kick off merger talks.

The executives didn’t respond to requests for comment as they were leaving, and spokespeople for Nissan and Honda declined to comment.

A separate report in Yomiuri said the aim is to merge in 2026 and have the holding company as the listed vehicle.

Honda and Nissan are both facing significant challenges, with the latter in dire financial straits as a deluge of electric and hybrid vehicles from competitors in China forces legacy brands to pool resources.

Nissan is in greater need of a turnaround due to cratering sales in the US and China, which have forced it to slash jobs, cut production capacity and lower annual profit outlook by 70%.

Talks were initially complicated by Taiwanese manufacturer Hon Hai Precision Industry Co., which reportedly expressed an interest in acquiring Nissan. But the iPhone-maker known as Foxconn is pausing its pursuit for now to see how talks between the two Japanese companies unfold, a person familiar with the matter said last week.

An alliance between Honda and Nissan - which could also include Nissan’s junior partner Mitsubishi Motors - would effectively split Japan’s automobile industry down the middle, pitting the trio against Toyota Motor Corp. and its partnerships with Mazda Motor Corp., Subaru Corp. and Suzuki Motor Corp.

Honda and Nissan had already begun laying the groundwork for a technical partnership earlier this year, announcing plans with Mitsubishi Motors to co-develop batteries, software and other EV technologies.