Honda and Nissan are reportedly in talks to discuss a potential merger to help both Japanese companies compete against Chinese EV makers.
According to the BBC, both firms responded to requests for comment with an identical statement: “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths.”
As we reported last month, Nissan is in full-scale emergency mode to save itself: the automaker is cutting 9,000 jobs, slashing production capacity, and selling off its stake in Mitsubishi Motors. The CEO is also reducing his own salary by half.
CEO Makoto Uchida – who took the job amid the epic Carlos Ghosn disaster – unveiled a “sweeping” reform plan after announcing the company had fallen to a net loss in the latest quarter. Nissan is also selling off nearly a third of its 34% stake in Mitsubishi, freeing up an additional $482.7 million. Back in the Ghosn days, Nissan took a controlling 34% stake in Mitsubishi, but even after the sale, Nissan said it should remain Mitsubishi’s largest shareholder. Its alliance with Renault has committed around $5.2 billion into its EV and battery development programs.
Nissan and Honda in talks to discuss a merger: report
Back in March, both Japanese automakers agreed to explore partnerships for EV, to help them compete against the booming EV market from Chinese competitors.
Honda is apparently considering several options with Nissan, which includes a merger, a capital tie-up, or the establishment of a holding company, as Automotive News Europe reported this morning.
Of course, merging Japan’s number two and number three automakers could be tricky, as it could come under intense political scrutiny in Japan due to likely job cuts. Nissan is also facing an unraveling with Renault, which holds a 36% state in the company, but news today says that the French automaker is “open” to Nissan pursuing merger talks with Honda, as Bloomberg reports.
In any case, both Honda and Nissan have been losing market share in China, which accounted for nearly 70% of global EV sales in November. Combined globals saw 7.4 million vehicles in 2023, but stiff competition from EV makers such as BYD are a major concern for the two automakers.
Still, others wonder if a merger will make any difference at this point. Jesper Koll, an analyst from Japanese financial trading company Monex Group told the BBC: “Is this really just rearranging the deck chairs on the Titanic in the sense that neither Honda nor Nissan really have any products or any technologies that global consumers want?”
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