Nissan and Honda hold talks about a merger of the two carmakers

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Nissan and Honda are in exploratory talks about a merger of the two carmakers that would create a $52bn Japanese behemoth, according to two people briefed on the matter. 

The two companies are studying a way to combine that would help them better compete at a time when traditional carmakers are contending with fast-growing Chinese electric-vehicle manufacturers, and slower-than-expected consumer demand for EVs. 

The talks between Nissan and Honda are at an early stage, and there are concerns about a potential political backlash in Japan because a merger of two of the country’s most storied automobile brands could result in significant job cuts, one of the people with knowledge of the discussions said.

This year shares of Nissan, which has a cross-shareholding structure with France’s Renault, have fallen 40 per cent.

The Japanese company has been searching for an anchor investor for several months, and the Financial Times reported in November that “all options” were being considered, including a merger with Honda. Nissan and Honda already have a partnership to develop and sell EVs. 

The talks between Nissan and Honda were first reported by Nikkei. Nissan said: “The content of the [Nikkei] report is not something that has been announced by either company.” 

It added: “As announced in March this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths. If there are any updates, we will inform our stakeholders at the appropriate time.” 

Honda did not immediately respond to a request for comment. Renault declined to comment. 

This is a developing story.