Honda, Nissan To Unite As No. 3 Carmaker

In vehicles sold, only Toyota, VW would top the combination; 'this is not a rescue'

- PETER LANDERS

Honda and Nissan said they plan to merge in 2026, a move Honda's chief executive said isn't a rescue of troubled Nissan but a recognition that developing new technologies is too hard to do alone.

The companies said they intend to create an automaker that, combined with Nissan partner Mitsubishi Motors, would be the third-largest in the world, after Toyota and Volkswagen, with more than eight million vehicles sold annually.

The announcement came at the end of a year in which Nissan's profit has tumbled in part because of a dated model lineup in the U.S. Both companies have cratered in China, where electric vehicles and plug-in hybrids are growing quickly. Last year, China surpassed Japan as the world's leading auto exporter by number of vehicles.

With the car industry moving toward autonomous vehicles driven by artificial intelligence, the companies said they need to combine research and cut costs to survive.

Still, completing the merger successfully will be a challenge. Honda and Nissan share similar model lineups and a focus on the U.S. market, so they face a choice of either eliminating one brand's models or leaving duplicated product and marketing teams in place.

The power balance is tilted in Honda's favor because it has a higher stock-market value.

The companies said Honda would nominate a majority of the directors of the combined company, and its top executive would come from Honda.