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.

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

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 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.

While Honda does have the Prologue, that vehicle was part of a $5 billion joint venture with GM that only lasted through the development of two vehicles. The Prologue has been a surprise EV hit, selling over 33,000 in 2024 and outselling the larger gas-powered Honda Passport.

Honda proposed a merger with Nissan at the end of last year that was accepted soon after, and as with any proposed merger of two industry giants, there is bound to be some collateral damage. Honda has expressed interest in merging with Nissan and Mitsubishi,

The mooted Honda Nissan merger and the fallout from leadership change at Stellantis suggests the auto industry must brace for turmoil, where size is a survival necessity.