Japanese car makers Honda and Nissan hold merger talks
Honda and Nissan are understood to have held exploratory talks about a potential merger to help them compete with electric vehicle (EV) makers, particularly in China.
In March, two Japanese automakers agreed to explore a strategic partnership for electric vehicles.
The two companies gave the same response to the BBC, saying: “As announced in March this year, Honda and Nissan are exploring various possibilities for future cooperation to fully leverage each other’s strengths.”
Many car brands are grappling with growing competition as the industry shifts from gasoline and diesel cars to electric vehicles and production booms in China.
Honda and Nissan did not deny the news, which was first reported by Japanese business newspaper Nikkei, but said “it was not something announced by the two companies”.
It is understood that discussions are at an early stage and there is no guarantee that an agreement will be reached.
“If there are any updates, we will inform our stakeholders at the appropriate time,” they added.
A potential merger between Japan’s second- and third-largest automakers could be complicated for a number of reasons.
Any deal is likely to be subject to intense political scrutiny in Japan because it could lead to massive layoffs. Nissan may also face breaking up its alliance with French automaker Renault.
Honda and Nissan agreed to collaborate on electric vehicle business in March and deepened their ties in August, agreeing to collaborate on batteries and other technologies.
In August, the two companies also announced Signed an agreement with Mitsubishi Motors Discuss intelligence and electrification.
Nikkei also reported that Nissan and Honda could end up with Mitsubishi in any potential partnership. Nissan Motor is Mitsubishi Motors’ largest shareholder.
Nissan shares rose more than 20% in Tokyo after the report was released. Honda shares fell about 2%, while Mitsubishi shares rose 13%.
“The idea that some of the smaller players can survive and thrive is becoming increasingly challenging, especially when you take into account all the other Chinese manufacturers,” said Edmunds analyst Jessica Caldwell The complexity, these manufacturers have entered and competed quite fiercely.”
“It’s just necessary to survive, not just to survive but to withstand the future.”
Honda and Nissan have been losing market share in China, which accounted for nearly 70% of global EV sales in November.
The two brands will have combined global sales of 7.4 million vehicles by 2023 but are struggling to compete with cheaper electric carmakers such as BYD, which has seen quarterly revenue soar, surpassing Tesla for the first time in October.
Jesper Koll from stock trading platform Monex questioned whether a merger would make the two companies more competitive.
“Neither Honda nor Nissan really have any product or technology that consumers around the world want, is this really just rearranging the deck chairs on the Titanic?”
“It was a good rescue from that perspective, but it didn’t create a new national champion.”
Additional reporting by Peter Hoskins.
