Honda and Nissan on the brink of a MASSIVE merger?

Two Japanese giants are teaming up — an alliance that could eventually have a Godzilla-sized impact on the auto industry.

Honda and Nissan — Japan’s second and third-largest carmakers, respectively — have signed a memorandum of understanding to begin exploring strategic partnership in the fields of vehicle electrification and intelligence.

Last year, Honda sold 3.98 million vehicles and Nissan 3.37 million. Their combination could make them the world’s third-largest automaker.

This is not a merger per se, although the close collaboration in software platforms and core EV components that it allows could lead to one in the future.

Honda and Nissan began collaborating early this year on the development of electric vehicles.

A merger could be a lifesaver for Nissan. As I’ve covered earlier, the company is on the brink of collapse, with insiders saying it has “twelve to fourteen months to survive.”

To cut costs, Nissan has slowed production, cut thousands of jobs, and sold a third of its stake in Mitsubishi. But it all may have been too little, too late.

Nissan dealers, who were already selling cars at a loss, suffered a further blow with news that the company intends to shutter most of its stand-alone Infiniti showrooms in America and absorb them into Nissan showrooms. Infiniti is the luxury division of Nissan.

Infiniti dealership owners stand to lose millions while sales, service, and office employees could lose their jobs.

The partnership would be aimed toward a future of electrified and intelligent mobility.

Last year, Honda sold 3.98 million vehicles and Nissan 3.37 million. Their combination could make them the world’s third-largest automaker, behind their Japanese rival Toyota Group, which sold 11.23 million vehicles last year, and Volkswagen Group of Germany, which sold 9.23 million.

Nissan also holds a large stake in smaller Japanese automaker Mitsubishi Motors.

Nissan and the French automaker Renault have been strategic partners for more than two decades, although that relationship seems to be on the rocks, especially after Japan’s controversial arrest and imprisonment of Nissan Renault CEO Carlos Ghosn in 2018.

We may never know the real story behind that, but the bad publicity definitely hurt Nissan. At the very least, the partnership with Honda could bring focus back on the product.

We will be watching as this story unfolds.