Honda and Nissan have agreed to hold talks over a possible merger, which could create the world’s third-largest automaker. The combined company would trail only Toyota and Volkswagen in global sales.
The deal comes as both companies face growing competition from Chinese carmakers. Honda and Nissan aim to combine resources to remain competitive in the electric vehicle market. Mitsubishi, another Japanese automaker, will also participate in the talks.
Mergers in the auto industry are not new, but they have struggled to succeed in the past. For example, Chrysler’s merger with Daimler-Benz ended in bankruptcy after only a decade. Nissan’s alliance with Renault collapsed following the arrest of its CEO, Carlos Ghosn.
However, Honda and Nissan believe their combined resources will allow them to create unique cars that neither company could achieve alone. The deal is seen as a response to Nissan’s financial struggles since the collapse of its alliance with Renault.
Nissan’s profits plunged 94% in the last six months, leading to cost-cutting measures, including laying off 9,000 workers and slashing forecasted operating profit by 70%. Some analysts predict Nissan could face bankruptcy as soon as 2026.
Source: https://edition.cnn.com/2024/12/23/business/nissan-honda-merge-automakers-intl-hnk/index.html