Honda, Nissan set to announce launch of integration talks, sources say

TOKYO: Honda and Nissan are expected on Monday to announce the start of business integration talks, two people familiar with the matter told Reuters, as the carmakers strive to survive a rapidly changing industry landscape.

The Japanese automakers are hosting board meetings on Monday about the talks and will later hold a joint press conference that Nissan's alliance partner Mitsubishi Motors is also expected to attend, according to the people.

Honda and Nissan aim to finalise the integration talks by June 2025, and, if successful, a joint holding company will list its shares while Honda and Nissan each will go private in August 2026, Japanese broadcaster TBS reported on Monday, citing a source.

A merger of the three Japanese brands would create the world's third-largest auto group by vehicle sales after Toyota and Volkswagen, in what would be the biggest industry-reshaping deal since the 2021 formation of Stellantis.

Honda and Nissan have been exploring ways to bolster their partnership, including a merger, as they face growing challenges from Tesla and Chinese rivals, Reuters reported last week.

Honda, Japan's second-biggest automaker, and Nissan, the third-largest, said in March they were considering cooperation on electrification and software development. They agreed to conduct joint research and widened the collaboration to Mitsubishi Motors in August.

Last month, Nissan announced a plan to cut 9,000 jobs and 20% of its global production capacity after its sales plunged in its key China and U.S. markets. Honda also reported a worse-than-expected earnings result due to declining sales in China.

Honda's market capitalisation is more than $40 billion, while Nissan's is about $10 billion.

Honda will likely appoint the leader and the majority of internal and external board members of the newly established holding company, public broadcaster NHK reported on Monday.

Forms of integration being discussed include Honda supplying hybrid vehicles to Nissan and the joint use of Nissan's car assembly factory in Britain, Kyodo News reported on Saturday.

French automaker Renault, Nissan's largest shareholder, is open in principle to a deal and would examine all the implications of a tie-up, sources have said.