Facing Chinese EV competition, Honda, Nissan starts merger talks

Japanese automakers Honda Motor and Nissan Motor announced Monday they have agreed to begin talks on a merger that would establish a new holding company by around August 2026.

The two companies signed a memorandum of understanding to start discussions toward a business integration under a new holding company, creating the world's third-largest automaker group to compete with US and Chinese rivals in the electric vehicle market.

However, former Nissan chief executive Carlos Ghosn cast doubt on the success of a potential merger, saying the latter's plans "do not make sense" at a news conference on Monday.

Honda and Nissan, Japan's second- and third-largest automakers by volume, respectively, aim to wrap up negotiations on the terms of their merger by June 2025.

Mitsubishi Motors, Nissan's partner, will decide by the end of January 2025 whether to join the merger.

Before Monday's merger talks kicked off, the Japanese companies already agreed in March this year to commence a feasibility study on a strategic partnership in EV production and software technologies to cut costs and improve competitiveness, with Mitsubishi Motors joining the talks in August.

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