Nissan and Honda hold talks about a combination of the two carmakers

Nissan and Honda are in exploratory talks about a combination of the two carmakers that would make a $52bn Japanese behemoth, according to two people briefed on the matter. 

The two companies are studying a way to merge that would assist them better compete at a period when traditional carmakers are contending with quick-growing Chinese electric-vehicle manufacturers, and slower-than-expected buyer demand for EVs. 

The talks between Nissan and Honda are at an early stage, and there are concerns about a potential political backlash in Japan because a combination of two of the country’s most storied automobile brands could outcome in significant job cuts, one of the people with knowledge of the discussions said.

This year shares of Nissan, which has a cross-shareholding structure with France’s Renault, have fallen 40 per cent.

The Japanese business has been searching for an anchor investor for several months, and the budgetary Times reported in November that “all options” were being considered, including a combination with Honda. Nissan and Honda already have a collaboration to develop and sell EVs. 

The talks between Nissan and Honda were first reported by Nikkei. Nissan said: “The content of the [Nikkei] update is not something that has been announced by either business.” 

It added: “As announced in March this year, Honda and Nissan are exploring various possibilities for upcoming collaboration, leveraging each other’s strengths. If there are any updates, we will inform our stakeholders at the appropriate period.” 

Honda did not immediately respond to a request for comment. Renault declined to comment. 

This is a developing narrative.