Honda and Nissan consider merger
Honda, Nissan, and possibly Mitsubishi Motors could establish a joint holding company to bundle their business activities. The information comes from a person familiar with the matter and was first reported by the Japanese business newspaper Nikkei. Both Honda and Nissan subsequently announced that neither company had indicated a merger.
However, the statements do not rule this out for the future. “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” the companies said in separate statements. Moreover, stakeholders would be informed about any updates in due course.
According to top executive Shinji Aoyama, Honda is considering several options, including a merger, a capital tie-up or the creation of a holding company. A final decision could be announced before Christmas.
The two Japanese carmakers have been exploring how they can cooperate on software-defined electric cars since the spring. According to an interim status report from August, batteries and electric axles, among other things, were to be the main areas of the intensified collaboration.
Should the merger or holding company go through, the cooperation would go far beyond software-defined electric cars and also include combustion engine and hybrid models. Such a group could achieve annual sales of around eight million vehicles. In 2023, Honda and Nissan were numbers seven and eight worldwide. Together, they would overtake companies such as GM, Stellantis and Hyundai-Kia to take third place, behind VW and Toyota.
A merger could be good for both companies. Nissan, in particular, is struggling: Nissan had to lower its profit forecast for the current financial year due to the weak business in China, among other things, and imposed a radical cost-cutting programme in November. The Japanese company plans to reduce its global production capacities by 20 per cent and cut 9,000 jobs.
Honda, on the other hand, is struggling to keep up with the competition when it comes to investing in new technologies. The partnership between Honda and GM has also been tarnished. At the beginning of December, for example, a collaboration for a self-driving car was terminated. Honda has also lost 30 per cent of its market share in China.
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