Mitsubishi has been invited, too.

Japanese automakers Honda and Nissan have announced plans to merge, a move that would create the world’s third-largest automaker by sales.

The two companies signed a memorandum of understanding recently, inviting a third Japanese car manufacturer - Mitsubishi Motors, a smaller Nissan alliance member - to join discussions on integrating their operations. This decision comes as the industry faces transformative challenges in the shift away from fossil fuels while automakers in Japan lagging behind global rivals in electric vehicle (EV) development.

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Honda's president, Toshihiro Mibe, was quoted as saying in a press release that the companies planned to unify under a joint holding company, which Honda will lead.

Each brand will retain its identity under the new structure. A formal merger agreement is expected by June 2025, with the holding company slated to list on the Tokyo Stock Exchange by August 2026.

If successful, the merger could create a company worth over $50 billion based on the combined market capitalization of Honda, Nissan, and Mitsubishi. Together, the three automakers would produce about 8 million vehicles annually, positioning them to compete with industry giants Toyota and Volkswagen.

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Even with the merger, Toyota would remain Japan's largest automaker, producing 11.5 million vehicles in 2023. In comparison, Honda manufactured 4 million vehicles, Nissan 3.4 million, and Mitsubishi just over 1 million.

According to Statista, a global statistics aggregator platform, Volkswagen Group was the world’s leading automaker by revenue as of May 2024 – more than $348 billion, followed by Toyota Motor with almost $312 billion and Stellantis with nearly $210 billion.

Honda Motor accounted for $141.3 billion and Nissan $87.7 billion.

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