Honda and Nissan are in talks about a potential merger, which could unite two major Japanese automakers that have recently faced difficulties. In a statement, the companies confirmed discussions but did not provide specifics or a timeline for when a deal might be finalized, if it materializes. The form of the potential joint venture remains uncertain. Nikkei was the first to report the news of this possible collaboration on Tuesday.
"Honda and Nissan stated on Tuesday that they are considering different opportunities for future collaboration, utilizing their respective strengths, as announced in March. They assured that any updates will be communicated to stakeholders at the right moment."
Honda and Nissan also confirmed to CNN that Mitsubishi is involved in these initial discussions, introducing a possible third significant Japanese automaker into the equation. Mitsubishi did not reply to requests for comment.
In March, Honda and Nissan revealed their partnership on electric vehicles, and in August, they announced collaboration on battery technology. However, both companies could gain from strengthening their alliance, as they have encountered difficulties this year.
Both companies, similar to numerous non-Chinese automakers, have faced challenges in the once-promising Chinese market, which is the largest car market globally. While Chinese consumers initially gravitated towards foreign brands, they have increasingly turned to domestic brands, which are perceived as offering better value within the country. Additionally, the Chinese government has offered incentives to accelerate the adoption of electric vehicles and plug-in hybrids among consumers.
While both companies provide EVs and plug-ins, Nissan, notably a trailblazer in EV technology, has been surpassed by Chinese brands like BYD, which offer more advanced technology at lower prices.
Nissan has faced challenges since its ex-CEO, Carlos Ghosn, became a fugitive, escaping from Japan to his home country, Lebanon. Ghosn was apprehended in Tokyo in 2018 on allegations of financial misconduct, leading to his dismissal by Nissan. He has consistently denied these accusations.
His removal disrupted the influential automotive alliance between Nissan, Renault, and Mitsubishi. Previously the largest partnership in the automotive industry, Renault has significantly decreased its ownership in Nissan, thereby weakening the Japanese automaker. Nissan reported a 90% drop in operating income from March to September compared to the same period the previous year.
At the same time, Honda, which is approximately five times larger than Nissan, is also encountering difficulties. The company revealed its intention to sell exclusively zero-emission vehicles in key markets by 2040. However, the shift has been gradual due to factors such as relatively low fuel prices, inadequate charging infrastructure, and heightened competition, which have reduced the demand for EVs in the United States and Europe.
Source: The-CNN-Wire & 2024 Cable News Network, Inc.