Will Honda-Nissan merger work amid stiff Chinese competition?

Honda and Nissan expect big benefits from their potential merger to create the world’s third-largest auto group but intense competition from China raises questions about whether they can make it work in time. The Japanese automakers said on Monday they had agreed to begin formal talks on a merger. While the outcome is not certain and will depend partly on troubled Nissan making progress in its turnaround, they aim to finalise the deal by August 2026. Nissan’s junior partner, Mitsubishi Motors, will decide by next month whether it plans to take part. The automakers are targeting more than 1 trillion yen ($6.4 billion) in synergies by leveraging a common platform, shared research and development (R&D) and joint procurement. Their operating profit target of more than 3 trillion yen represents a 54 per cent increase on their combined results last year.