Honda and Nissan are set to formalize their merger talks, aiming to finalize the deal by August 2026. The Japanese automakers are targeting a combined operating profit of over $3 trillion, with shared platforms, research and development, and joint procurement expected to deliver significant synergies.
However, intense competition from Chinese rivals raises concerns about whether Honda and Nissan can complete the merger in time. Both companies face challenges, including a lack of compelling electric vehicle (EV) offerings and struggling sales in key markets such as China and the United States.
Analysts predict that building up capabilities to take on Chinese rivals will require significant investment and time. “Both companies lack compelling EV offerings, and the combined entity would still face the challenge of a new EV model pipeline and R&D in technology,” said Vincent Sun, a senior analyst at Morningstar.
The merger would create the world’s third-largest auto group by vehicle sales, but analysts question whether it will deliver significant geographic diversification. The integration could help Honda and Nissan weather potential impacts from import tariffs under incoming US President Donald Trump.
For Japan, which is heavily reliant on its automotive industry, a successful merger would be crucial to maintaining economic influence. “Given the industry dynamic, there could be more consolidation to come,” analysts at Morgan Stanley said in a note earlier this month.
The challenge ahead is significant, but Honda and Nissan’s merger may provide an opportunity for them to adapt and thrive in a rapidly changing industry.
Source: https://www.reuters.com/business/autos-transportation/honda-nissan-tie-up-requires-something-neither-can-spare-time-2024-12-24