The Honda-Nissan merger looks increasingly inevitable. The situation has come together rapidly. Reports in late November indicated the automaker only had a year’s worth of money to survive. The company was looking for a major investor to keep things going, and Honda responded with interest in creating a partnership.

Assuming the automakers can overcome all the regulatory hurdles, both companies could become stronger after this team-up. They could share parts and have improved economies of scale as ways to cut costs. There’s also the possibility of combining technology like driver-assistance features and EV innovations.

Adding Mitsubishi To The Merger

In the latest step towards the merger, Mitsubishi signed a memorandum of understanding with Nissan and Honda to explore the possibility of participating in the tie-up. The move is hardly surprising because Nissan owns a controlling stake in Mitsubishi.

Under the proposed plan, Mitsubishi has until the end of January 2025 to decide whether or not to be part of the cooperation between Nissan and Honda. Given Mitsubishi’s close ties to Nissan, it could also gain technological and pricing advantages by joining this alliance.

“Honda and Nissan have begun considering a business integration and will study the creation of significant synergies between the two companies in a wide range of fields. It is significant that Nissan’s partner, Mitsubishi Motors, is also involved in these discussions,”

– said Nissan Director, President, CEO and Representative Executive Officer Makoto Uchida

The new announcement also indicates that Honda and Nissan might file paperwork with the United States Securities and Exchange Commission to announce trading shares as part of integrating their businesses. The automakers didn’t provide any details about when they planned to file these documents.

What Happens Next

If the merger moves forward, which seems feasible at this point, then Honda would likely buy some or all of Renault’s stake in Nissan. Taiwan’s Foxconn has also expressed interest in buying at least some shares.

It’s unclear whether Renault would retain any ownership stake in Nissan if the merger with Honda happens. Nissan and Renault have been in an alliance since 1999, and Mitsubishi joined the group in 2017.

TopSpeed’s Take

The Honda and Nissan merger could shake up the auto industry. With Mitsubishi potentially joining the team, the new conglomerate is just getting bigger. Combining three prominent Japanese automakers could allow all three to excel.

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