By DCB Editorial, December 18, 2024
The Nikkei reported that Honda and Nissan are preparing to negotiate a potential merger, which may eventually include Mitsubishi Motors. This strategic move aims to create a formidable Japanese automotive entity to rival Toyota and better compete in the global market, particularly in the rapidly expanding electric vehicle (EV) sector.
Earlier this year, both companies agreed to collaborate on EV batteries and software. Honda’s CEO hinted at a potential capital tie-up during these discussions. While neither company has confirmed the merger report, both have reaffirmed their commitment to exploring deeper cooperation.
The proposed plan involves establishing a new holding company with shared equity stakes. This structure would allow the combined entity to optimize resources and strengthen its competitive edge against global EV leaders like Tesla and major Chinese automakers.
Nissan is grappling with stalled revenue growth, declining profits, and a significant debt burden. To address these challenges, the company is undertaking restructuring efforts and exploring strategic partnerships.
One option under consideration is a merger with Honda, which could create a powerful Japanese automotive entity capable of rivaling Toyota. The proposed plan includes establishing a new holding company with shared equity stakes, enabling the combined entity to pool resources and compete more effectively against global automotive leaders like Tesla and major Chinese manufacturers.
While the merger report has not been confirmed, both Nissan and Honda have reiterated their commitment to future collaboration, signalling a willingness to explore deeper synergies to navigate the rapidly evolving automotive industry.
