In December 2024, reports emerged that two of Japan's automotive juggernauts are looking to form a merger akin to the automotive equivalent of a 'dream team.' On Dec. 23, the leaders of Japanese automakers Nissan (NSANY) and Honda (HMC) announced that they intend to merge under a holding company in an effort to stay competitive against its rivals in a world shifting towards electric vehicle adoption.

Nissan Motor Corporation is a Japanese automaker founded in 1933 and the parent automaker of Infiniti and formerly Datsun. Nissan produces a wide variety of mass-market vehicles, including popular SUVs like the Rogue,

The mooted Honda Nissan merger and the fallout from leadership change at Stellantis suggests the auto industry must brace for turmoil, where size is a survival necessity.

Honda, Nissan, and Renault's merger may take on a new direction, per Bloomberg. According to the outlet, Honda is worried that Renault, which owns about 35 percent of Nissan, may be bought up by a third party while the deeply complex merger works its way toward completion.

Honda executives recently shared insights into their rationale for the proposed merger with Nissan.During a media roundtable at CES 2025 in Las Vegas Honda stressed the urgency to address mounting competition from Chinese automakers,

To hit this target, Nissan will need to rake in approximately 400 billion yen in fiscal 2026—roughly $2.6 billion at current exchange rates. That’s a tall order, especially considering Nissan’s operating profits plummeted by 90.

Honda and Nissan are weighing the creation of a joint holding company “amid the dramatic changes in the environment surrounding both companies and the automotive industry,” Honda said. Among the reasons for exploring a merger: Critically examining plants and jobs.

It seems like Japanese automakers are fast falling behind the EV movement, with Tesla and Volkswagen taking the lead. However, that could all change by 2025, says CNN, as Honda and Nissan

Honda and Nissan’s merger risks failure due to cultural clashes and misalignment. Find out why HMC and NSANY stocks are uncertain investments.

Honda and Nissan have signed a memorandum of understanding (MoU) to start discussions that could pave the way for a merger of the two companies.

The Honda-Nissan merger would be a historic move if it happens, but French automaker Renault has already put an unexpected bump in the road.