December 18 (Reuters) — Japanese automakers Honda (7267.T) and Nissan (7201.T), according to sources, are in talks about deepening their cooperation, including a possible merger, as competition from Tesla and Chinese manufacturers is driving the restructuring of Japan’s automotive industry.
Together, the two Japanese companies would become the third-largest automotive group in the world by car sales, following Toyota (7203.T) and Volkswagen (VOWG_p.DE).
Sales: Last year, Honda sold 3.98 million cars globally, while Nissan sold 3.37 million cars over the same period. Their combined sales in 2023 totaled 7.35 million vehicles, more than the 7.31 million reported by South Korea’s Hyundai (005380.KS) and its subsidiary Kia (000270.KS), which is currently the third-largest automotive group in the world.
Production: Last year, Honda produced 4.19 million vehicles globally, while Nissan made 3.44 million cars.
Employees: According to securities filings, Honda employed 194,993 people in its consolidated group, while Nissan had 133,580 employees as of the end of March.
Market capitalization: Honda’s market capitalization is around $44 billion, while Nissan’s is about $10 billion after a sharp increase in its stock price on Wednesday. This would make a full merger between the companies larger in scale than the $52 billion deal between Fiat Chrysler and PSA in 2021, which led to the creation of Stellantis (STLAM.MI).
Key markets: The United States is Honda’s most important market, accounting for one-third of its car sales in 2023. Together with Canada and Mexico, North America accounts for 37% of sales, while China’s share is 31%, and Japan’s is 15%. Europe represents only 2% of total sales. For Nissan, North America is also its largest market, accounting for 37% of its cars sold in the 2023 financial year, with the U.S. accounting for 27%, China for 23%, Japan for 14%, and Europe for 10%.
Electrification goals: Honda aims to increase its production of electric vehicles to more than 2 million units per year by 2030, when it aims to transition 40% of its sales to electric vehicles and fuel cell vehicles. By 2040, Honda will only sell electric vehicles and FCVs. As gas-electric hybrids have become popular in the key North American market, Honda announced an additional target on Wednesday to sell 1.3 million hybrid vehicles annually by 2030, doubling the 2023 level. Nissan, once a pioneer in electric vehicles with the launch of the first mass-market EV, the Leaf, in 2010, aims to have electric vehicles and hybrids account for 60% of its global sales by 2030, according to its updated strategy released in March.