Honda, Nissan announce plans to merge

Japanese automakers Honda and Nissan announced Monday they were exploring a merger that would allow them to better compete amid a changing automotive landscape.

The companies plan to spend the next six months hammering out a deal, which would create the third largest automaker in the world behind Toyota and Volkswagen. 

They’re also aiming to establish a joint holding company to unite their operations and list the company on the Tokyo Stock Exchange by August 2026, the companies said in a statement, which also notes Honda would control a majority of the company’s board of directors.

“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands,” Nissan President and CEO Makoto Uchida said.

A third Japanese automaker, Mitsubishi Motors, will also participate in discussions.

Nissan has struggled financially and last month announced plans to lay off 9,000 workers and slash global production capacity by 20 percent. Uchida, who announced a 50 percent pay cut, said at the time that Nissan was too slow to adjust to auto industry changes including consumer demands and rising costs.

The ratings agency Fitch downgraded Nissan’s credit rating to “negative,” citing competition with China and the threat of tariffs on U.S. imports when President-elect Trump takes office next month.

A deal could save the company and give both Nissan and Honda the combined might to compete in the electric vehicle space.

The Associated Press contributed.