Honda and Nissan are currently in discussions about a potential merger, bringing together two major Japanese automakers who have faced recent challenges.
Both companies have confirmed that discussions are underway, but specific details and timelines have not been provided. The potential joint venture’s structure is also unknown at this time. Initial reports of the proposed merger came from Nikkei on Tuesday.
“As announced in March, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” the companies stated in a joint release on Tuesday. “If there are any updates, we will inform our stakeholders at the appropriate time.”
Furthermore, Honda and Nissan have mentioned that Mitsubishi is also part of these preliminary talks, potentially involving a third major Japanese automaker. Mitsubishi has yet to comment on the matter.
In March, Honda and Nissan announced a partnership for electric vehicles, followed by a collaboration on battery technology in August. However, given the challenges both companies have faced this year, strengthening their relationship could prove beneficial.
Both companies, like many non-Chinese automakers, have faced challenges in the Chinese market, which was once promising. Chinese consumers have shifted towards local brands with perceived higher value, impacting global brands like Honda and Nissan.
The Chinese government has also incentivized the adoption of electric vehicles and plug-in hybrids, a market segment where both Honda and Nissan have a presence. Despite their offerings, Chinese brands like BYD have surpassed them in technology and affordability.
Nissan has also struggled following the departure of former CEO Carlos Ghosn, who faced legal issues in Japan before fleeing to Lebanon. Ghosn’s exit disrupted the alliance between Nissan, Renault, and Mitsubishi, with Renault reducing its stake in Nissan, weakening the partnership.
Reportedly, Nissan’s operational income dropped by 90% between March and September compared to the previous year. Similarly, Honda, a larger company than Nissan, is facing challenges in its transition to selling only zero-emission vehicles by 2040, particularly due to slow adoption rates in key markets like the US and Europe.
