Honda, Nissan and Mitsubishi merger set to create £40bn car manufacturing giant - but ex-boss criticises 'desperate move'

Honda and Nissan have announced plans to join forces, forming the world’s third-largest car maker by sales.
The two Japanese companies said they had signed a memorandum of understanding on Monday and that smaller Nissan alliance member Mitsubishi Motors had also agreed to join the talks on integrating their businesses.

Nissan’s chief executive Makoto Uchida said: “We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base.”

Car makers in Japan have lagged behind their big rivals in electric vehicles and are trying to cut costs and make up for lost time.

News of a possible merger surfaced earlier this month, with unconfirmed reports saying that the talks on closer collaboration partly were driven by aspirations of Taiwan iPhone maker Foxconn to tie up with Nissan, which has an alliance with Renault SA of France and Mitsubishi.

A merger could result in a behemoth worth more than 50 billion dollars (£39.77 billion) based on the market capitalisation of all three car makers.

Together, Honda and the Nissan alliance with Renault SA of France and smaller automaker Mitsubishi Motors would gain scale to compete with Toyota and Germany’s Volkswagen AG. Toyota has technology partnerships with Japan’s Mazda and Subaru.

Even after a merger Toyota, which rolled out 11.5 million vehicles in 2023, would remain the leading Japanese car maker.

If they join, the three smaller companies would make about eight million vehicles. In 2023, Honda made four million and Nissan produced 3.4 million. Mitsubishi Motors made just over one million.

Nissan, Honda and Mitsubishi announced in August that they would share components for electric vehicles like batteries and jointly research software for autonomous driving to adapt better to dramatic changes centred around electrification, following a preliminary agreement between Nissan and Honda set in March.

Honda, Japan’s second-largest car maker, is widely viewed as the only likely Japanese partner able to effect a rescue of Nissan, which has struggled following a scandal that began with the arrest of its former chairman Carlos Ghosn in late 2018 on charges of fraud and misuse of company assets, allegations that he denies. He eventually was released on bail and fled to Lebanon.

Speaking on Monday to reporters in Tokyo via a video link, Ghosn derided the planned merger as a “desperate move”.