Japanese auto giant Honda and rival Nissan announced Monday that they have reached an agreement to begin merger talks, in an attempt to catch up with Chinese and American competition in the electric car sector .
The two companies confirmed that Honda and Nissan have agreed to “begin looking toward business integration through the establishment of a joint holding company,” and that Mitsubishi will also decide whether to join by the end of January .
The collaboration between the two companies, before Mitsubishi joins, could create the world’s third-largest automaker and expand the development of electric vehicles and autonomous driving technologies .
But Honda’s CEO stressed that the deal was not a bailout for Nissan, which last month announced thousands of job cuts and a 93 percent drop in net profit in the first half of the year .
“This is not a bailout,” Honda CEO Toshihiro Mibe told reporters, stressing that one of the conditions of the merger was that Nissan complete its “transformation ” plan.
Several car manufacturing companies are facing difficulties due to declining sales and fierce competition in many markets .
Foreign brands are struggling in China, where electric car makers such as BYD are doing well on the back of growing demand for cleaner vehicles .
Citing “dramatic changes in the environment surrounding both companies and the auto industry,” a joint statement noted a plan to list the holding company on the Tokyo Stock Exchange in August 2026 .
This comes after reports that Taiwanese electronics giant Foxconn unsuccessfully sought to approach Nissan to acquire a majority stake .
It then asked Renault to sell its 35 percent stake in Nissan, an effort that is said to have been put on hold.
