According to reports by Nikkei Asia, two Japanese automotive giants, Honda and Nissan, are reportedly preparing for merger negotiations, with the potential inclusion of Mitsubishi in the future. This move would create a duopoly in the Japanese automotive industry, with the other faction being Toyota, which holds stakes in Subaru, Mazda, and Suzuki.
Should the merger come to fruition, it would combine the resources of the two automakers, enabling them to better compete with Tesla and Chinese electric vehicle manufacturers. Nikkei Asia reports that Honda and Nissan plan to sign a memorandum of understanding (MoU) regarding shareholdings in a new parent company.
Honda, Nissan, and Mitsubishi sold approximately four million vehicles in the first half of this year, while Toyota sold 5.2 million vehicles in the same period. If Honda and Nissan collaborate with Mitsubishi, it would create a corporation with an annual sales volume of 6.7 million vehicles, surpassing General Motors but falling short of Hyundai.
In August of this year, Honda, Nissan, and Mitsubishi signed a memorandum of understanding to jointly discuss a platform for further development of artificial intelligence and vehicle electrification. This builds upon the agreement previously signed between Honda and Nissan in March of this year.
Honda’s previous plans included the launch of a series of affordable electric vehicles, developed in collaboration with General Motors and based on a new global architecture, slated for release in 2027. However, these plans are reportedly canceled as of October 2023. Meanwhile, GM has signed an MoU with Hyundai to collaborate on strategic initiatives.
In September, Nissan announced it had repurchased approximately 5% of its own shares from Renault in a deal worth nearly 80 billion yen (around $552 million). In a statement at the time, Renault said the sale of shares to Nissan would result in an estimated loss of 1.1 billion euros (around $1.14 billion) due to the shares being valued lower than previously reported on the company’s balance sheet.
Nissan has been facing a financial crisis after its long-time partner, Renault, started selling its stakes in the company. According to sources from the Financial Times, Nissan is seeking “a stable, long-term shareholder such as a bank or insurance company” to replace Renault as it finalizes its electric vehicle partnership with Honda, signed in March. Without a new anchor investor, Nissan is said to have only 12 to 14 months of survival.
News of Nissan’s crisis comes just weeks after the company reported a loss of 9 billion yen (around $60.3 million), leading to the cutting of about 9,000 jobs and a 20% reduction in global production. The company also acknowledged that it had failed to capitalize on the growing demand for hybrid vehicles in the US market.
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According to recent reports, Japanese automotive giants Honda and Nissan are in the preliminary stages of discussing a potential merger. This development has sparked intrigue within the industry, as a union between these two powerhouse brands could significantly reshape the automotive landscape. With Honda’s renowned innovation and Nissan’s global reach, a combined entity would possess formidable capabilities and resources. As the talks progress, the automotive world awaits with bated breath, eager to witness the potential birth of a new titan in the industry.
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