Japan’s Honda and Nissan in preliminary merger talks: reports
According to media reports on Wednesday, Japanese auto giants Honda and Nissan are in the early stages of merger negotiations.
According to the Nikkei, the Financial Times, and others, a partnership would enable them to more effectively compete with Tesla and other manufacturers of electric vehicles.
According to analysts, the two companies decided in March to investigate a strategic alliance on electric vehicles in an effort to catch up with their Chinese rivals.
On Wednesday, a Honda representative stated that a possible merger was already being considered.
“We are discussing possibilities for cooperation between Honda and Nissan in the future, in a wide range of fields and in various areas, and those possibilities include the latest reports, but there is nothing decided,” the spokesman told AFP.
Nissan said: “The content of the report is not something that has been announced by either companies. As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths.
“If there are any updates, we will inform our stakeholders at the appropriate time.”
Nissan in particular has been having trouble; this month, it announced 9,000 job cutbacks and lowered its annual sales projection.
Honda’s stock fell more than 1% in early trading, while Nissan’s increased more than 20%. Nissan is the largest shareholder in Mitsubishi Motors, which saw a 14% increase.
According to the Nikkei and other outlets, who cited persons familiar with the situation, Honda and Nissan are planning to operate under a single holding company and will shortly sign a memorandum of understanding for the new firm.
They said the firms would consider bringing Mitsubishi Motors under the holding company to create one of the world’s largest auto groups.
Honda and Nissan earlier issued almost identical statements in response, saying the details in the report had not been announced by either side.
As they had previously stated, they were “exploring various possibilities for future collaboration, leveraging each other’s strengths” in their comments.
Toyota is the top carmaker in Japan, followed by Honda in second place and Nissan in third.
China’s supremacy in EVs, a market where Japanese companies have lost ground by concentrating on hybrid vehicles, helping it surpass Japan as the world’s largest vehicle exporter in 2023.
As part of its ambitious goal to achieve 100 percent EV sales by 2040, Honda announced plans in May to increase its investment in electric vehicles to $65 billion by 2030.
Nissan has signalled similar ambitions.
It said in March that 16 of the 30 new models it plans to launch over the next three years would be “electrified”.
The world’s auto giants are increasingly prioritising electric and hybrid vehicles, with demand growing for less polluting models as concern about climate change grows.
At the same time, however, there has been a slowdown in the EV market on the back of consumer concern about high prices, reliability, range and a lack of charging points.
In Japan, hybrid vehicles that mix internal combustion engines and batteries have remained popular, making up 40% of sales in 2022.
In 2022, just 1.7% of cars sold in Japan were electric, compared to 5.3 percent in the US and 15% in western Europe.