If there's one thing executives at Honda Motor and Nissan Motor need to fix first when - and if - they merge, it's their China business. The Japanese duo's sales have been falling for years in the world's largest car market.

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.

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.

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

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

Honda and Nissan announced merger plans in December 2024, and the process has been progressing as per schedule. The merger will also include Mitsubishi, and both companies aim to reach a definitive agreement by June 2025.

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 executives recently shared insights into their rationale for the proposed merger with Nissan.During a media roundtable at CES 2025 in Las Vegas Honda stressed the urgency to address mounting competition from Chinese automakers,