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Nissan, Honda Eye Potential Merger

Two of the world's biggest automakers may soon become one.

Nissan's best-selling car, the Altima.

Nissan's best-selling car, the Altima.

Photo Credit: Wikipedia/Mr.choppers
Honda's best-selling automobile, the CR-V .

Honda's best-selling automobile, the CR-V .

Photo Credit: Wikipedia/M 93

Nissan Motor Co., Ltd. and Honda Motor Co., Ltd. have signed a memorandum of understanding (MOU) to discuss a potential merger aimed at revolutionizing the future of mobility and electrification. 

Announced on Monday, Dec. 23, the goal is to establish a joint holding company that could significantly impact the automotive landscape, and potentially make the combined corporation the world's third-largest auto manufacturer.

The merger aims to accelerate initiatives for carbon neutrality and zero traffic fatalities by pooling resources, knowledge, and advanced technologies. 

Nissan CEO Makoto Uchida called this a “pivotal moment,” emphasizing the exceptional value this partnership could offer to customers worldwide.

"Honda and Nissan are two companies with distinctive strengths," Honda Director and Representative Executive Officer Toshihiro Mibe said. "We are still at the stage of starting our review, and we have not decided on a business integration yet."

The proposed merger seeks to standardize vehicle platforms, streamlining production, reducing costs, and enhancing efficiency.

It also aims to integrate research and development functions, allowing for collaborative research on next-generation software-defined vehicles (SDVs) to foster innovation and lower expenses. Collaborative use of facilities and production lines is projected to improve capacity utilization and reduce fixed costs.

By sourcing common parts and collaborating with suppliers, the companies plan to enhance supply chain competitiveness and streamline purchasing operations.

Significant cost reductions are expected through shared systems and back-office functions, while integrating sales finance functions will create new mobility solutions and financial services for customers. 

Enhanced collaboration will also strengthen the talent pool for advancements in intelligence and electrification technologies.

The companies aim to finalize a definitive agreement by June 2025, with plans for a technical listing on the Tokyo Stock Exchange in August 2026. Honda will nominate a majority of the directors for the new entity upon listing.

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