To start, the phrase “a strategic partnership for the era of vehicle intelligence and electrification” is used frequently in the press release. But what does this really mean for the EV market, particularly for Honda?

Japanese automakers have faced mounting pressure with the rise of Chinese EVs globally. While many consumers remain skeptical about Chinese-made EVs, their market share has steadily grown, while Japanese brands have struggled to perfect their EV offerings.

So why is this merger significant? For one, it could lead to a more streamlined and profitable business model for both companies. Honda, with its strong track record, enjoys high customer loyalty and steady sales. In contrast, Nissan and Mitsubishi have faced challenging times, but a merger like this could provide the boost they need to recover.

In the press conference, both companies outlined key strategies for success, including the standardization of vehicle platforms, enhanced R&D capabilities, cost synergies, optimized manufacturing, stronger supply chains, and improved efficiency. Both Honda and Nissan aim to reach a definitive agreement on the business integration, including a share transfer plan, by June 2025. If successful, the new entity could generate sales revenue exceeding 30 trillion yen (about RM857 billion or USD190 billion). Honda is set to take a majority role in the new company’s management, while both brands will continue to develop their distinct identities.

Takao Kato, the director, representative executive officer, president, and CEO of Mitsubishi Motors, commented, “In an era of change in the automotive industry, the study between Nissan and Honda about business integration will accelerate synergy maximization effects, bringing high value to the collaborative businesses with Mitsubishi Motors. To realize synergies and make the best use of each company’s strengths, we will also study the optimal form of cooperation.”

But what makes this merger truly pivotal? Japanese automakers have yet to establish a dominant presence in the EV market. Consider the discussion around electric vehicles: everyone talks about the Tesla Model 3, the BYD Seal, or even the Proton eMAS 7. Yet, Toyota’s bZ4X rarely makes the same impact. While Toyota has pioneered hybrid technology and even introduced a fuel cell vehicle, it lacks an iconic EV. Honda, though it made a promising start with the Honda e, has yet to achieve major EV success. The Honda Prologue, too, has not captured the market’s attention in the same way.

For years, Japanese manufacturers have been cautious about fully embracing Battery Electric Vehicles (BEVs). They’ve been hesitant to invest heavily in R&D, seeing the potential limitations of BEVs as a barrier. But the rise of companies like Tesla and the growing competition from Chinese EVs may have forced their hand. Now, it seems the Japanese are preparing to make a bold move, hoping to reclaim their dominance in the global automotive market and restore their legacy as leaders in innovation.

Do you think ICE cars will be a bigger deal in this merger? With how Honda has been reviving enthusiast cars like the Prelude, it could have an impact on how Nissan operates in the near future. Perhaps a Silvia rebirth? One can dream!

Let us know down below what do you think the merger signifies apart from just sharing of tech and electrification.