In December 2024, reports emerged that two of Japan's automotive juggernauts are looking to form a merger akin to the automotive equivalent of a 'dream team.' On Dec. 23, the leaders of Japanese automakers Nissan (NSANY) and Honda (HMC) announced that they intend to merge under a holding company in an effort to stay competitive against its rivals in a world shifting towards electric vehicle adoption.

The problem is there is no likely outcome that would leave both companies and their employees better off than they are today.

As Honda and Nissan negotiate the terms of a possible merger, we take a speculative look at what new vehicles could spawn from the unprecedented collaboration.

Honda and Nissan's $58bn merger aims to compete with China's EV dominance, but risks include cultural clashes, overlapping markets, and uncertain innovation outcomes.

Honda and Nissan signed a memorandum of understanding (MoU) to begin discussions on a potential business integration.

Nissan Motor Corporation is a Japanese automaker founded in 1933 and the parent automaker of Infiniti and formerly Datsun. Nissan produces a wide variety of mass-market vehicles, including popular SUVs like the Rogue,

The request has been made amid concerns about foreign influence during the merger process, according to Kyodo and Bloomberg.

Discussions are currently underway for the merger of Honda and Nissan. Working together, Honda-Nissan will have improved cost efficiencies and production capacity. They will be in a better position to tackle the threat from China-based EV manufacturers. If things go smoothly, the Honda-Nissan merger could be completed by 2026.