Honda and Nissan Joined Together, For Better or For Worse

By announcing their merger in 2026, Honda and Nissan are making a desperate gamble in the face of China’s rising influence.

A potential merger between Honda, Nissan, and Mitsubishi could create a giant worth over $50 billion, based on the stock market valuation of the three companies. Together, the Japanese brands hope to compete with giants like Toyota or Volkswagen. A choice of rivals that is quite surprising given that the automotive industry is dominated by American Tesla and Chinese BYD and Geely. Not to mention Volkswagen’s current struggles. The lack of ambition is pretty evident, but let’s move on.

Rumors about this merger emerged earlier this month. Some sources even suggest involvement from Foxconn, the Taiwanese manufacturer of iPhones, which is considering buying shares held by Renault in Nissan. Officially, Nissan denies any direct contact with Foxconn, but it’s hard to believe that these sudden maneuvers are unrelated to the current context.

For Nissan, the situation is critical. Its CEO, Makoto Uchida, no longer hides the company’s financial difficulties, marked by significant losses and a 20% reduction in global production capacity. The brand, once a pioneer in electric vehicles, struggles to regain its former glory since the scandal involving its former president, Carlos Ghosn, in 2018. Ghosn, now in Lebanon, made a somewhat gourmet end-of-year remark calling this merger a “desperate move”.

On paper, this union could enable the three manufacturers to produce nearly 8 million vehicles annually. Beyond the numbers, this merger mainly reflects an industry in full transformation. The rising influence of China in electric vehicles, combined with protectionist decisions such as tariffs imposed by Canada and the United States, is pushing automakers to react. Yet, this rapprochement seems more about survival than a clear strategic vision. But what does the stock market say? Investors seem cautiously optimistic, and as expected, Nissan and Honda’s shares soared after the announcement, but it will be 72 hours to see the full reaction. Consolidation or last-ditch effort before chaos? Only time will tell.

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