Honda and Nissan plan to merge by 2026

• Honda and Nissan are discussing a merger that could be finalized in 2026
• Mitsubishi has been invited to join the party
• Nissan, in particular, is struggling, and an insider recently warned the automaker only has 12–14 months to survive

On Monday Honda and Nissan confirmed merger talks are underway with a signed agreement for timelines and a plan.

Japanese news outlet Nikkei said the merger is to fend off competition in the electric vehicle segment.

The signed memorandum of understanding lays out a plan that would see the two automakers delist from the Tokyo Stock Exchange in July or August of 2026. Following this, shares of both companies would be placed in a joint holding company.

The automakers’ combined sales in 2023 totaled more than 8 million vehicles. Such a figure for the merged company would make it the third-biggest automaker by sales volume, behind Toyota and Volkswagen Group, which sold 11.2 million and 9.2 million vehicles in 2023, respectively.

The automakers are already closely linked. Honda and Nissan have been collaborating on EV and software development since March, and Mitsubishi joined the partnership in August. Nissan already owns 34% of Mitsubishi, and Nissan and Mitsubishi also share vehicle platforms and technology via their existing alliance, which also includes Renault. Mitsubishi has also collaborated with Honda in the past, most recently in the area of battery leasing for EVs via a joint venture called Altna.

Japanese automakers are consolidating in an effort to reduce costs but also catch up in the EV race after years of promoting hydrogen fuel cells as an alternative. Toyota, Mazda, and Subaru also announced in May plans to collaborate on internal-combustion engines.

The moves are aimed at fending off competition from international rivals, particularly from China, which last year overtook Japan to become the world’s largest vehicle exporter.

Nissan, in particular, is struggling. The automaker announced plans in October to lay off approximately 9,000 employees, representing 6.7% of its global workforce, and to cut production capacity by 20% due to declining sales, primarily in the U.S. and China. The Financial Times also reported in November that an insider has warned Nissan only has about 12–14 months to survive. This merger would resolve Nissan’s current financial issues.

Honda and Nissan highlighted that the merger would go beyond software and powertrains. The joint company would provide scale advantages for manufacturing systems and facilities along with optimization opportunities. It would also enhance both company’s purchasing power. Vehicle platform standardization would also be evaluated, but no details were provided.

Note – This story was updated on Dec. 23 after Honda and Nissan confirmed the merger talks and timeline