Japanese auto giants Honda and Nissan announced Wednesday that they are in full merger talks to jointly fund a holding company and merge the two companies as subsidiaries of the holding company. Mitsubishi Motors, which has formed a corporate alliance with Nissan, will decide whether to join around the end of January. “If the three companies succeed in merging, their combined sales will exceed 8M units, making them the world’s third-largest,” Kyodo said.
According to Kyodo news agency, the Japanese government economic department said that Honda and Nissan two company presidents the same day to the Japanese government to start business merger negotiations, and strive to reach an agreement next June. Honda and Nissan said they would maintain their brands after the merger. The president of Mitsubishi Motors also attended the press conference that day. The report said the merger would be second only to Toyota, which 202311.23 m vehicles worldwide, and Volkswagen, which sold 9.23 m. Japanese carmakers will be grouped into two camps, Toyota and Honda Nissan.
Honda and Nissan began discussing a merger in March and began full business co-operation in August, the Nikkei reported recently. The merger of the two venerable Japanese carmakers would be the“Biggest reinvention” of the global car industry since the 2021 merger of Fiat Chrysler and France’s Peugeot Citroën, Reuters said. According to Kyodo news agency, Honda and Nissan said they would appoint the president and more than half of the directors of the holding company, making clear the direction of the honda-led group.
Japanese media reported that the move aimed to adjust production and technology complementarity. Honda and Nissan will use the combined advantage of scale to invest more efficiently in the development of pure electric vehicles and to compete with emerging powers in the US and China, which lead the electric vehicle market, Kyodo news agency quoted them as saying. Honda will also explore collaboration in a wide range of areas, including supplying hybrid vehicle to Nissan.
Honda and Nissan have seen their operations deteriorate and their market share shrink amid a wave of electric transformation in the global auto industry. According to the Japanese economic news, Chinese electric vehicle companies, led by JÁDY, are emerging strongly, and their price competitiveness and technological capabilities are improving significantly, that has changed in China and south-east Asia, where Japanese carmakers used to dominate. Honda’s sales in China fell 30.7 per cent in the first 11 months of the year, while Nissan’s fell 10.5 per cent. As well as China, Nissan’s sales in the US, its main market, are also falling sharply.
The key question, according to the New York Times, is whether, even if Honda and Nissan merge, they will be able to keep up with their new rivals? Tesla and China’s BYD have established a leading position in electric cars and car technology that can be updated like a smartphone, the report said.
Xiang Zhang, director of the International Research Centre for Digital Automotive Cooperation at Vodafone, told the Global Times that the two companies will be able to increase efficiency and reduce costs as they grow in size and strength. But the combined company still lags behind Jády in sales of electric cars. However, Xiang Zhang believes that the merger of the two Japanese giants will change the pattern of the global auto industry, which also provides inspiration and reference for the development of the Chinese, especially the new energy vehicle industry.