 "Platform, EV plans: What to expect from Honda, Nissan, Mitsubishi merger")
In a recent development, Honda Motor and Nissan Motor have signed a memorandum of understanding (MoU) to explore a potential business integration, with Mitsubishi Motors expected to join by the end of January 2025. The agreement outlines the establishment of a holding company through a joint share transfer, which will be listed on the Tokyo Stock Exchange by August 2026, once the terms are finalised. This is not the first time Japanese automakers have formed a joint venture—Toyota and Suzuki joined forces in 2019 to achieve synergies through product and platform sharing. However, this collaboration is expected to operate on a larger scale, akin to the formation of Stellantis, which united automakers such as Fiat Chrysler Automobiles, Citroen, Peugeot, and others.
Platform sharing and business opportunities
The merger will focus on standardising vehicle platforms, enabling Honda, Nissan, and Mitsubishi to develop their individual products using a common architecture. Unlike the Toyota-Suzuki alliance, which has produced cross-badged models such as the Grand Vitara and Urban Cruiser Hyryder, this collaboration will develop models that are fundamentally distinct and cater to different segments while sharing a common platform. Additionally, the alliance will expand its focus to include the two-wheeler and aviation sectors.
Cost-effectiveness
The research and development (R&D) functions of the three companies will be integrated, with costs apportioned according to the shareholding ratio. The merger will also optimise manufacturing operations by sharing assembly lines and restructuring the supply chain, thereby reducing costs.
Increased competitiveness
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This merger aims to revitalise the participating automakers, enabling them to compete more effectively with Chinese rivals and Tesla, which currently dominate the global electric vehicle (EV) market. The companies will not only focus on developing advanced EVs but also work on high-tech battery packs and robust fast-charging technology. The goal is to deliver improved driving range and reduced charging times, facilitating faster adoption of EVs.
Governance and future outlook
According to Japanese news reports, Honda will nominate the majority of internal and external directors to lead the new holding company. This merger comes as a lifeline for Nissan, which has faced financial difficulties, including a significant revenue slump and the layoff of over 9,000 employees. Mitsubishi, on the other hand, is expected to tap into new markets and segments with the upcoming models, strengthening its position further. This merger has the potential to reshape the automotive landscape, leveraging the strengths of each company to drive innovation and efficiency while competing on a global scale.