Ford Rivals Honda And Nissan Officially Begin Merger Talks

Times are certainly tough in the automotive industry these days, with automakers facing increased competition from China, coupled with various macroeconomic pressures and weak demand for all-electric vehicles that many invested heavily in over the past few years, to boot. As such, some automakers are choosing to team up and pool resources – including Ford and Volkswagen, a relationship that has thus far proven quite fruitful. As Ford Authority reported last week, two of Ford’s direct rivals – Honda and Nissan – were also rumored to be discussing a potential merger, and now, those talks are official.

Honda and Nissan have announced that the two companies will set up a joint holding company and explore a merger that – if agreed to and approved – would become the world’s third-largest automaker with combined sales of 30 trillion yen ($191 billion USD) and an operating profit of more than three trillion yen ($19 billion USD), according to Reuters. Talks are expected to conclude by July 2025, and then, a holding company would be set up in August 2026 – at which time the stock of both automakers would be delisted.

Nissan has been mired in financial difficulties for some time now, which prompted it to announce that the automaker plans to reduce its global work force by 9,000 workers. That and other moves are expected to help Nissan reduce its costs by $2.6 billion while also maintaining a heathy free cash flow. In the meantime, Chinese automaker BYD has grown by leaps and bounds, and is even on track to exceed Honda and Ford in terms of global sales by the conclusion of 2024 – a rapid rise, particularly given the fact that it doesn’t compete in nearly as many markets as those two.

This certainly may not be the last time we see such a merger or similar action, however. As Ford CEO Jim Farley predicted over two years ago, the EV transition may wind up spurring quite a bit of industry wide consolidation, as the executive stated. However, Farley also poured cold water on the notion that The Blue Oval may collaborate with other automakers aside from Volkswagen just this past September, too.