With increasing competition in automotive market, especially among EVs, Honda and Nissan merger might prove beneficial for both brands
As per a recent report, Honda and Nissan are considering a merger. Both companies are soon expected to enter negotiations for a merger, pooling resources together and facing rising competition from Tesla and other Chinese manufacturers. The extent of this merger is not yet known and speculations suggest that the intention is to dominate EV sector in the future.
Currently,?? Nissan is in a bit of a crisis. The company has been facing stifling competition from rival brands both in Japanese Domestic Market and elsewhere. The iconic Japanese car manufacturer is speculated to have just 12 to 14 months to survive and turn things around. A strategic partnership with Honda might prove beneficial for Nissan.
Honda And Nissan
Nikkei Asia recently reported that Honda and Nissan are expected to enter negotiations for a potential merger soon. The report doesn’t mention the source of this development. If everything goes right, both car manufacturers may potentially operate below the roof of a new holding company. Nissan shares have surged 23.7% after reports of a merger with Honda broke out.
Nissan currently holds a 24% stake in another iconic Japanese car manufacturer, Mitsubishi, which could also join this merger later in the future. Both Nissan and Honda are yet to confirm the veracity of this report. Official stand as of now is that both brands are exploring various possibilities for future collabs, leveraging one another’s strengths.
Honda and Nissan have been working together on various projects since March 2024 and expanded their partnership in August 2024. This is when Mitsubishi joined the club and the agenda for all three manufacturers was to tackle EV industry by jointly manufacturing electric vehicles and related software.
The crisis around Nissan seems to be getting deeper and deeper. The company looks like it is facing hardships with industry experts suggesting they have just 12 to 14 months to survive. Nissan has reduced production of its best-sellers like Rogue (X-Trail) and Frontier and has asked dealers to sell cars at a loss in markets like North America.
Rising Competition
The automotive industry has been reaching a phase where OEMs are facing unprecedented challenges to stay afloat. There is a huge influx of affordable Chinese cars in major automotive markets and they seem to be acing the well-established Western players and mainstream Japanese players.
This forces traditional car manufacturers to innovate and get creative to stay relevant in the game. Meeting EV demand of the future is also a race where Honda, Nissan and Mitsubishi should evolve and compete at the highest level. A strategic partnership in this regard might prove fruitful as risks and expenses are also shared between the brands.
Statement from Nissan
“The content of the reports that Honda, Nissan and MMC are considering a business integration is not based on an announcement from our company. As announced in March and August of this year, Nissan, Honda, and MMC are considering various possibilities for future collaboration including the content of the report, but no decisions have been made. If there are any updates, we will inform all stakeholders at the appropriate time.” – Spokesperson Nissan
