By Tuba Ongun
In a landmark development for the global automotive industry, Nissan and Honda Motors on Monday signed a memorandum of understanding (MoU) to begin official discussions on a potential business integration.
Mitsubishi Motors also joined the talks by signing a three-party MoU to evaluate its participation, with a decision expected by January 2025.
While the MoU establishes a structured framework to facilitate confidential exchanges and dialogue between the companies, top executives emphasized that the deal does not confirm a business integration but sets the stage for thorough evaluations.
"Given the necessity of exchanging confidential information, we signed an MoU, which is an agreement to start the discussion and provides a framework for the discussion. It does not mean that business integration is decided," Honda Director and Representative Executive Officer Toshihiro Mibe said at a press conference.
It followed months of collaboration between Nissan and Honda, which began with a feasibility study announced in March, Mibe said, adding that Nissan and Honda aim to clarify the feasibility of integration by around the end of January 2025.
This decision builds on previous collaborative efforts, including joint research on next-generation software-defined vehicles (SDVs), electric vehicle (EV) components, and platform development.
The driving force behind these discussions is the shared understanding that the automotive industry is undergoing a significant transformation.
"Our aim is to increase mid- and long-term corporate value by addressing the changing market, including the emergence of vehicle intelligence electrification, and generate synergy through an integration of the two companies resources, such as talents and technologies.
"Through business integration, which is deeper than the current strategic partnership, we will be able to truly increase our competitive edge that will not be possible under the current collaboration framework," he added.
Integrating resources and technologies of the two companies will help them lead the future of mobility, he stressed, adding that this collaboration allows them to deliver innovative solutions, from advanced EV batteries to intelligent vehicle systems.
He also underlined that Honda is expected to nominate the majority of the board members of the new entity during its formation. However, both companies emphasized that the integration would respect each brand’s identity, ensuring equitable contributions to the future strategy.
Once the definitive agreement is concluded, the joint holding company, projected to launch by August 2026, will be incorporated and be listed on the prime market of the Tokyo Stock Exchange, he said.
Nissan CEO Makoto Uchida, for his part, underlined that in a rapidly changing environment, companies that fail to adapt risk being left behind.
He stressed that if the two companies are combined, annual sales of 7.5 million vehicles and net revenues of over 30 trillion yen ($190 billion) are estimated, putting it in the global top tier.
The new holding company's operating profit is expected to hit more than 3 trillion yen ($19 billion).
"If business integration becomes a reality, we will be among the top-class global automakers. Electrification and vehicle intelligence require tremendous amounts of investments," he said.
Mitsubishi Motors CEO Takao Kato expressed enthusiasm for the partnership, noting that collaboration is critical in an era of rapid technological evolution.
Kato said Mitsubishi will evaluate its role in this new framework, leveraging its strengths in ASEAN markets and frame vehicles, to maximize synergies with Nissan and Honda.
The final decision will depend on the outcomes of ongoing discussions and due diligence, ensuring that the integration supports sustainable growth and delivers value to all stakeholders.