Nissan and Honda, two of Japan's automotive giants, are reportedly in talks about a potential merger that could reshape the global car industry.
According to a report by Nikkei, Nissan, which is facing financial challenges, may partner with Honda to secure its future.
If confirmed, this merger would be the largest in the auto industry since Fiat Chrysler joined forces with PSA to form Stellantis.
Combined, Honda and Nissan would boast global sales of approximately 7.4 million vehicles annually.
The report suggests that the companies are expected to sign a memorandum of understanding (MOU) in the near future, with Nissan potentially holding a 24% stake as the top shareholder in the newly formed entity. Mitsubishi Motors, which already shares an EV alliance with Nissan and Honda, may also play a role in the merger.
Nissan has been grappling with declining demand in key markets like China and the United States.
In response, the automaker has been cutting costs and scaling back production. Honda, with a market capitalisation of ¥5.95 trillion (around NZ$67.2 billion), significantly surpasses Nissan's ¥1.17 trillion (NZ$13.2 billion) valuation, making it a potential stabilising force for the struggling brand.
Despite the report, both Honda and Nissan have denied any formal merger announcement. A joint statement clarified, "No merger had been announced by either company."
French automaker Renault, a major shareholder in Nissan, also declined to comment, while Mitsubishi Motors remained silent on the matter.
This potential merger could mark a seismic shift in Japan's car industry, consolidating resources and positioning the companies to better navigate a competitive and evolving global market.