Honda and Nissan, two of Japan’s largest carmakers are said to have begun talks that could result in a possible merger, reports Nikkei Asia. The setting up of a joint holding company under which both brands would operate – or a more direct merger between Honda and Nissan – would allow the companies to share more resources. This would help the brands bolster themselves amid increasing global competition, particularly from Chinese EV brands and Tesla.

1. Honda-Nissan could share new EV platform and electric powertrain
2. Mitsubishi may be a part of the merger; no word from Renault

This report comes just a few months after Honda and Nissan signed an MoU, which could lead to the brands sharing an EV platform and develop a common electric powertrain. In August, the companies expanded the collaboration with a new MoU that would see them work together on the development of EVs, especially SDVs (Software-Defined Vehicles) that use artificial intelligence and have ADAS tech.

Neither company has confirmed the talks or the merger, reiterating the intent of the previous MoU. While Nikkei Asia also reports that the merger could expand to include Nissan’s Alliance partner Mistubishi, French brand Renault, which is also part of the Alliance, said it has no new information. However, the Renault-Nissan alliance has been on shaky ground ever since Carlos Ghosn’s ousting in 2018.

Considering both Honda and Nissan are somewhat late to the EV party globally – neither brand has a portfolio of all-electric vehicles yet – and that Chinese carmakers are pricing their EVs extremely competitively, it makes sense for the two Japanese brands to collaborate on future developments. Along with keeping R&D costs in check, the brands can share tech and synergies to be more competitive.

If the merger goes through, the Japanese car market will effectively be split into two blocks: one would be the Honda-Nissan-Mitsubishi alliance, while the other would be the Toyota-led conglomerate that includes Mazda, Subaru and Suzuki.

It remains to be seen how this report affects Honda Cars India and Nissan Motor India, respectively. Honda has just brought out the third-gen Amaze compact sedan in the market, and has plans to bring in an Elevate-based EV by 2026. Meanwhile, Nissan recently brought out the Magnite facelift, and has just one other car in its Indian portfolio, the X-Trail. However, it plans to bring the Patrol SUV to India by 2026.

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