Menu

Search

  |   Economy

Menu

  |   Economy

Search

Honda and Nissan Push 2026 Merger as Ex-CEO Ghosn Criticizes Bold Move

Honda and Nissan unveil bold 2026 merger plan as Ghosn questions its future. Credit: Nissan Newsroom

Honda and Nissan announced a groundbreaking 2026 merger that could reshape the global auto industry. While the move aims to rival Tesla and Chinese EV giants, ex-CEO Carlos Ghosn expressed skepticism about the partnership's potential, citing mismatched company dynamics.

Honda and Nissan Announce 2026 Merger Plans Amid Rising Chinese Competition

On Monday, Honda and Nissan announced that they are in merger talks with the goal of completing the deal by 2026. This would mark a significant shift for Japan's automotive industry and highlight the growing competition from Chinese electric vehicle manufacturers, Reuters shares.

If the two companies were to merge, the resulting automaker would be third in global sales, behind only Volkswagen and Toyota.

Merging to Tackle Tesla and BYD

In addition to providing scale, the merger would allow the two businesses to pool their resources and compete more effectively against Tesla and other agile Chinese competitors like BYD.

In a $52 billion agreement in 2021, Fiat Chrysler Automobiles and PSA formed Stellantis. If Japan's No. 2 and No. 3 automakers, Honda and Nissan, were to merge, it would be the largest shakeup in the global car industry since then.

Mitsubishi’s Decision Could Add Global Scale

According to the firms, a decision on Mitsubishi Motors' (a smaller company in which Nissan has a majority stake) participation will be made by the end of January.

A combined press conference was held in Tokyo by the chief executives of all three.

Honda CEO Highlights Threats from Chinese EV Makers

Honda CEO Toshihiro Mibe stated, "The rise of Chinese automakers and new players has changed the car industry quite a lot," referring to the trends in technology such as electrification and autonomous driving.

"We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten."

Ambitious Revenue Goals for the Merged Automaker

The two businesses have stated that, in the event of a merger, they would seek to achieve combined revenues of 30 trillion yen ($191 billion) and operating profit of over 3 trillion yen.

In June 2025, they planned to finalize the talks and establish a holding company. By August 2026, they hoped to delist the shares of both firms.

They announced that the bulk of the board members will be appointed by Honda, a firm with a market capitalization of over $40 billion—roughly four times that of Nissan.

Expanding Collaboration with Mitsubishi Motors

If the Japanese conglomerate were to merge with Mitsubishi Motors, it might sell over 8 million vehicles worldwide. Hyundai and Kia of South Korea are currently in third place.

A merger is one of the options being considered by Honda and Nissan to strengthen their collaboration, according to Reuters last week.

Challenges Amid Declining Sales in Key Markets

They expressed interest in working together on electrification and software development in March. In August, they expanded their partnership to include Mitsubishi Motors.

Following a precipitous decline in sales in the United States and China, Nissan revealed last month that it would be slashing 9,000 positions and 20% of its worldwide production capacity.

Despite a solid financial foundation thanks to its motorbike and hybrid car operations, Honda announced worse-than-expected results as a result of a fall in sales in China.

But according to Honda's Mibe, "this is not a rescue of Nissan." He went on to say that the merger could not have gone through without Nissan's business rebound.

China is the largest market in the world, and multinational automakers like Honda and Nissan are losing ground there to local manufacturers like BYD that produce electric and hybrid cars with cutting-edge software.

Ex-CEO Ghosn Questions Merger Compatibility

The former chairman of Nissan, Carlos Ghosn—now wanted in Japan for escaping bail and fleeing to Lebanon—spoke in a separate online press conference on Monday about his doubts about the success of the Honda-Nissan alliance, stating that the two automakers were not complementary.

Renault, Nissan's biggest stakeholder and a French automaker, mentioned that it would "discuss with Nissan and consider all possible options." Renault is reportedly amenable to a potential partnership between Honda and Nissan.

According to insiders who spoke with Nissan, the Japanese firm turned down a bid from Taiwanese electronics manufacturer Foxconn, which was looking to grow its budding electric vehicle contract manufacturing business.

According to Bloomberg News, Foxconn opted to put the strategy on hold following a meeting between a delegation it sent to France and Renault.

During Monday's news conference, Nissan CEO Makoto Uchida refuted the claim that the company's merger discussions with Honda were prompted by Foxconn's action.

Mibe stated that Honda will maintain its links with General Motors, whereas Uchida stated that Nissan maintained a "project basis" collaboration with Renault in the event of synergy.

The announcement of the merger deal sent Honda's shares up 3.8%, Nissan's up 1.6%, and Mitsubishi Motors' up 5.3%, all while the benchmark Nikkei market closed up 1.2%.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.