Honda-Nissan joined hands! Signed MoU for joint holding company, know what it means

New Delhi: There was a big discussion going on in the world automobile market for the last few days. There were reports of merger between Japanese giant car companies Nissan, Honda and Mitsubishi. Finally, putting an end to all the speculations, these three companies have announced to come together and signed an MoU for a joint holding company. Nissan and Honda aim to form the largest car company together.

Japanese automakers Honda Motor Company and Nissan Motor Company Limited, along with Mitsubishi Motors, announced on Monday that they have signed a memorandum of understanding (MOU) to begin discussions on a possible merger. This proposed merger includes plans to start a joint holding company. Which is being seen as a plan to compete with rivals like Tesla and Chinese car company Build Your Dream (BYD) in the electric vehicle segment.

The company says that the goal of this merger is to achieve annual sales of 30 trillion yen (about Rs 16.30 lakh crore) and operating profit of more than 3 trillion yen (Rs 1.62 lakh crore). These three companies are planning to finalize the discussions by June 2025. It is believed that this holding company can be operational by August 2026. With the launch of the holding company, the shares of both Honda and Nissan will be delisted at the end of July and August 2026, which is planned to be listed on the stock exchange later. Honda, Nissan and Mitsubishi together will produce about 8 million vehicles per year, which will enable them to compete with global giants like Toyota Motor Corporation and Volkswagen AG.

Honda’s influence will be seen the most in this joint venture as it is the largest company in this partnership. On the other hand, Nissan’s sinking boat is expected to get a big support. After coming into existence, this joint holding company will give a new direction to the world’s automobile market. Where Toyota and Volkswagen are present in the number one and two positions, Honda-Nissan will get a chance to strengthen their presence. Under this joint venture, work will be done on new technology, vehicle platform and design.

Since research, development and operation will be done together, it will also facilitate the manufacture of vehicles at a lower cost. The effect of which will not only be seen on the prices of vehicles but it is also expected to increase profits. Along with new technology, work will also be done on next generation software defined vehicles (SDV’s).

Nissan and Honda have announced their plan to start a joint holding company through joint share transfer. Which will be the parent company of both the companies. This will be decided after the general meeting of the shareholders of each company. For this, the company will talk to the concerned authorities and take permission from them. For this, the companies have also released a timeline plan. Makoto Uchida, Nissan’s director, president and CEO, said: “Honda and Nissan have begun to consider a business integration, and research will be done on synergies between the two companies in several areas. We hope that this plan will be successful.”

Honda’s director Toshihiro Mibe said, “At this time of change in the automobile industry, which is said to occur once every 100 years, we hope that Mitsubishi Motors’ participation will provide a big boost to the business integration of Nissan and Honda. Apart from this, we will be successful in starting a strong joint venture.”

Mitsubishi Motors’ director, president and CEO Takao Kato said, “At this time of change in the automotive industry, the business integration between Nissan and Honda is expected to be successful. This will also benefit Mitsubishi Motors’ allied businesses.”