Japanese manufacturers Honda and Nissan are reportedly starting merger negotiations

DETROIT – Japanese automakers Nissan engine And Honda engines They reportedly plan to begin merger negotiations to better compete in the rapidly changing global automotive industry Nikkei newspaper reported on Tuesday.

According to the report, Honda and Nissan are considering operating under a holding company and will sign a letter of intent soon. They also want to eventually bring Mitsubishi Motors, in which Nissan is the main shareholder with a 24% stake, under the holding company.

According to Nikkei, the combined Nissan-Honda-Mitsubishi company would be equivalent to more than 8 million vehicle sales annually. This would place the company among the largest automakers in the world, but still lag behind other Japanese automakers Toyota engineat 11.2 million in 2023, as well as German car manufacturer Volkswagenwhich reported sales of last year 9.2 million Vehicles.

In similar statements, Honda and Nissan neither confirmed nor denied the report: “The reported content was not published by our company,” Honda said. “As announced in March this year, Honda and Nissan are exploring various opportunities for future collaboration, leveraging each other’s strengths. We will communicate any updates to our stakeholders in due course.”

The merger report follows the two Japanese automakers entering into a strategic partnership for shared automotive components and software earlier this year.

Such a merger would be the largest merger in the automotive industry since the merger of Fiat Chrysler and France-based PSA Groupe Stellar in January 2021.

Automotive consultants and other experts have recently called for one Increase in mergers and acquisitions to share costs and better compete with fast-growing Chinese automakers as well as the U.S. leader in all-electric vehicles Tesla.

U.S.-traded Honda shares rose about 2% in midday trading on Tuesday. Over the counter Nissan shares rose by more than 11%.