NEW YORK, Dec. 23 (Xinhua) -- Nissan and Honda have announced plans to merge by 2026 in a seismic shift for the Japanese auto industry, after signing a memorandum of understanding that allows them to continue discussions about integration via a joint holding company, USA Today on Monday cited the companies' announcement.
If Nissan and Honda are to integrate, they could become the third-largest auto group in the world, local media reported, adding that Mitsubishi Motors, of which Nissan owns a 24 percent stake, will announce if the company will join the merger by the end of January.
"The rise of Chinese automakers and new players has changed the car industry quite a lot," said Honda CEO Toshihiro Mibe at a press conference, citing technological trends of electrification and autonomous driving. "We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten."
Once the merger is complete, Honda and Nissan aim to have combined sales of 191 billion U.S. dollars. Jessica Caldwell, head of insights for auto research and news company Edmunds, told local media that the merger makes sense.
"A merger would be a long-term strategy, not a solution to any short-term challenges either company is facing," said Caldwell. "Both Nissan and Honda are positioning themselves for the future, which will be defined by electrification and autonomous technology - developments that are extremely costly."
