Today, Honda and Nissan held a joint press conference about the merger discussions. The parties were represented by Mr. Toshihiro Mibe, Director, President, and Representative Executive Officer of Honda Motor Co., Ltd., and Mr. Makoto Uchida, Director, Representative Executive Officer, President, and CEO of Nissan Motor Co., Ltd.
The automotive industry is going through a tough phase where legacy brands steadily lose appeal and fall short against newly emerged Chinese manufacturers globally. However, Honda, Nissan, and Mitsubishi together will be a mighty Godzilla (the Goliath from Japan). If the merger takes place, the group will become the globally third-largest automotive manufacturer in the world. Just Honda and Nissan alone sell more than 75 lakh cars annually. That is substantial, but it does not seem big enough if split between the two.
A Brief History Of These Japanese Brands
The oldest and most motorsport-heritage brand among the three is none other than Mitsubishi. Mitsubishi was founded in 1870 and started its passenger automobile business in 1917. However, in India, we had to wait until the end of that century; to be precise, Mitsubishi entered India in 1997 with the Lancer, which was produced through a joint alliance with Hindustan Motors. In 2016, Mitsubishi decided to join the Nissan-Renault group, but unfortunately, that same year, it exited the Indian automotive scene.
Nissan holds the second place among the founding ages. Since 1999, they have joined hands with French automaker Renault and started producing sister models around the world. It took them until 2005 to enter the Indian market, debuting with the X-Trail. India recently saw the new launch of the 4th Generation X-Trail, with the Magnite being the only other car on sale.
Honda is the youngest among these globally; however, it is the oldest to set foot in India. Honda debuted in India in 1995 with the help of Usha International, and in 1996, it launched its first car, the City. Currently, Honda Cars India has only a three-car portfolio, excluding the still-selling older-generation City and Amaze.
A Bright Future Ahead?
Among the three, Honda is in the best position in India and globally. Rumours also suggest that the merger talks are due to pressure from the Japanese government to assist fellow national brands. That aside, the initial talks were mainly about the merger of Nissan with Honda, and Mitsubishi will be making its decision by January 2025. Nissan might pull out all its stakes and alliances to show some value for Honda. As reported by Bloomberg, the exiled former Nissan CEO Carlos Ghosn responded to this move as a desperate attempt to survive.
If all the discussions go well, the itinerary is said to include the following: Execution of a definitive agreement concerning the business integration (including the share transfer plan) - June 2025 (planned); Extraordinary shareholders' meeting of the companies (resolutions to approve the share transfer) - April 2026 (planned); Delisting from the Tokyo Stock Exchange - End of July-August 2026 (planned); Effective date of the share transfer - August 2026 (planned).
The main goal is to save money, stop losing money, and earn money. All these objectives can be realised if the three brands combine to share technology and intelligence. More importantly, they should create more compelling product lineups.
