What would a Honda-Nissan merger mean for Indiana?
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In an effort to make up the gap on Chinese competitors in the electric vehicle market, Honda and Nissan are engaged in talks on a potential merger that would create the third-largest automaker in the world.
But what would a merger between two giant Japanese carmakers mean for Indiana, where Honda has a 1.3 million-square-foot plant in Greensburg?
According to some observers like Amrou Awaysheh, the proposed merger likely won’t have much of an effect at all. Awaysheh is a professor of operations and supply chain management at Indiana University and also serves as the executive director of the IU Business Sustainability and Innovation Lab. He predicts that as the larger company, Honda as a company would absorb smaller or underperforming Nissan operations.
“You’re not merging two equal partners here. It’s essentially a larger one taking over what the other is doing,” Awaysheh said. “If it was a Nissan facility that was here, I would be telling you, ‘Okay, we should be concerned about what’s going to happen to it.’ But the Honda facility here, nothing’s going to happen to it.”
Representatives from Honda did not respond to interview requests from Inside INdiana Business. The company’s website says the Greensburg facility employs 2,500 workers since starting production in 2008. Honda makes its Civic Hatchback, CR-V and Insight Hybrid there.
In 2023, Honda made 4 million vehicles while Nissan produced 3.4 million. However Honda’s market cap is close to $54 billion, while Nissan’s is a little over $11 billion.
For a merger to make financial sense, the combined company would look to shed costs by combining plants and leaning into economies of scale. According to Awaysheh, that means there’s even a small chance that the Greensburg plant could absorb some production from nearby Nissan facilities.
“There’s a small probability [Honda’s Greensburg plant] might grow a little bit. We talked about economies of scale and part of that is shifting some of the smaller Nissan facilities to existing Honda facilities—that’s why the merger makes sense,” Awaysheh said. “Then we might actually see the Honda facility in Indiana grow a little.”
Nissan has two facilities in Tennessee and one in Mississippi.
Nissan had seen its U.S. sales lagging amid a series of leadership scandals. The two companies have previously agreed to share components for electric vehicles like batteries and to jointly research software for autonomous driving.
Sharing technology around EVs to compete with Tesla and Chinese giants like BYD is a big factor in Nissan wanting to merge with Honda. Both companies have seen their sales drop sharply in China itself, but Chinese cars also always taking hold in much of the world outside the U.S., forcing other manufacturers to create new solutions for EVs.
“Right now there’s a lot of Tesla look-alikes that have only made EVs. They’re selling their EVs all over the world at incredibly low prices,” said Awaysheh.
Mitsubishi is part of the Nissan Alliance and is also in talks to merge with Honda. The merger is far from finalized and likely would come in 2026, according to reporting by the Wall Street Journal.