It’s official. After rumors and reports swirl on the fate of Nissan, Nissan and Honda have signed a memorandum of understanding (MOU) to start the discussions to integrate the two companies through the establishment of a joint holding company by August 2026. Meanwhile, Mitsubishi Motors has signed a separate MOU to explore the possibility of their participation, involvement, and synergy sharing.
Nissan and Honda will be independently run, but wholly-owned subsidiaries of a new holding company. Mitsubishi Motors will have until January 2025 to make up its mind whether to join the new holding company. If they do, Mitsubishi Motors will sign an additional MOU. The timeline set for finalization by June 2025 and implementation by August 2026—will not be delayed whatever Mitsubishi Motors’ decision would be.
It’s planned that Honda will have majority of the internal and external directors of the joint holding company. President and representative director or president and representative executive officer of the joint holding company will be selected from among the directors nominated by Honda.
Both carmakers deny that the decision is driven by the desire to save Nissan. Instead, they cite a rapidly changing business environment for both companies (and the automotive industry in general), the MOU between Nissan and Honda serves to maintain their global competitiveness. It will also enable both brands to deliver more attractive products and services to customers nationwide.
Marking the announcement, Nissan Director, President, CEO and Representative Executive Officer Makoto Uchida said: “Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
Honda Director and Representative Executive Officer Toshihiro Mibe said: “Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing. Honda and Nissan are two companies with distinctive strengths. We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order to find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams.”
Nissan and Honda will establish an integration preparatory committee to facilitate a smooth integration and will conduct focused discussions.
Based on the committee’s discussions, as well as the results of due diligence, the companies will examine and analyze more specific synergies. By promptly realizing the synergies from the integration, Nissan and Honda can aim to become a world-class mobility company with sales revenue exceeding 30 trillion yen and operating profit of more than 3 trillion yen.
The expected synergy will see an acceleration in R&D, particularly in areas of platforms, software-defined vehicles, and automotive intelligence. It will result in standardized vehicle platforms across various product segments as well as the “mutual complementation” of their global vehicle offerings including combustion engine, HEV, PHEV, and EV models.
The Nissan-Honda merger will also result in the optimization of supply chain optimization and even manufacturing plants. It will result in possible shared production lines to improve capacity utilization.
The companies expect that the integration of systems and back-office operations, along with the upgrade and standardization of operational processes will further drive down costs.
Name the product of honda and nissan SANDA motors
ReplyDeleteFrom what I understand, the term "merge" implies a lot more than just platform sharing and components. I assume Honda and Nissan will have access to each other's supply chains hopefully to significantly reduce costs in production. If Mitsubishi Motors joins, then they will have easier access to Mitsubishi Corporation goods to hopefully make production costs even lower.
ReplyDeleteLast couple of paragraphs in the story:
DeleteThe Nissan-Honda merger will also result in the optimization of supply chain optimization and even manufacturing plants. It will result in possible shared production lines to improve capacity utilization.
The companies expect that the integration of systems and back-office operations, along with the upgrade and standardization of operational processes will further drive down costs.
That's doesn't even matter, as to say this because of having a partially negative bias towards Japanese cars thanks to the existence of South Korean products since South Korea is a country that's known for having an excessive hatred towards Japan, then I think a merger between Nissan and Honda would also help Renault so that it may benefit the latter from the Southeast Asia since its not a market that Nissan's French owner considers that region as part of its to do list. (Renault is also owned by the government of France.)
DeleteSo infiniti/nissan will be back in F1? Honda will have a diesel pick-up, rallliart will be back with an evos w/ honda k engine?
ReplyDeletePretty sad Japanese Brand are disappearing and need to merge just to gang up on China
ReplyDeleteThat's the result of profit-driven japanese car companies whereas chinese companies aims to make mobility affordable to many low income families.
DeleteDifficult task, whose engineering technology will be followed or take the lead.
ReplyDeletePut it simply, Honda is taking control of Nissan because Nissan failed big time.
ReplyDeleteIt is interesting to see how under common ownership will they manage 2 mainstream brands (akin to Kia-Hyundai)
In all honesty, common ownership means its because of the nationality and even the region where it comes from, Honda and Nissan are Japanese while Hyundai and Kia are South Koreans - hence four of them are Asian companies.
DeleteOn the other hand, Renault, being European (French) may look after fellow car manufacturers from the same continent where France belongs to, while Sweden's Volvo might be an ideal replacement for Nissan and Mitsubishi, Germany's Mercedes Benz and BMW could also be useful for Renault to trade its said Asian (Japanese) partners for brands that even share the same identity as the French. (Because the clue is that the French, Swedes and Germans are also Europeans so common ownership is key as chemistry.)
Strength in numbers, honda engine and transmission, mitsu PHEV, nissan EV. Adapt or perish
ReplyDeleteJust perish, anything to say, to be honest?
Deleteaccording to carlos ghosn himself, this merger will not work.
ReplyDeleteMostly bcoz of each company's engineering design pride as whose design solution is best or will actually work..