Nissan and Honda are on the verge of a major partnership that could reshape the global auto industry. The two Japanese automakers are discussing a possible merger that would create a company with annual sales of nearly 7.5 million vehicles, making it the world’s third-largest automaker.
The move is seen as an effort to stay competitive in the rapidly evolving electric vehicle market, where China’s BYD and Tesla dominate. Nissan, which owns a 24% stake in Mitsubishi, has been struggling financially, with recent cost-cutting measures resulting in 9,000 job losses globally.
A closer alliance with Honda would bolster Nissan’s position in its home market against Toyota and its coalition of Mazda, Subaru, and Suzuki. The potential partnership could also help Renault, which is ending a long-term alliance with Nissan, by selling some of its stake in the Japanese company.
Industry experts say that a successful merger between Nissan and Honda could give them an edge in terms of technology development and software capabilities. However, they also warn that such a union would require significant investment to overcome their weaknesses in electric vehicles and software-defined cars.
Professor Stefan Bratzel, director of Germany’s Center of Automotive Management, noted that the consolidation process is underway in the industry, with companies like Volkswagen struggling to adapt to changing market trends. “Those left behind or who don’t have enough money for investment will get into big trouble,” he said.
The potential partnership between Nissan and Honda has raised questions about whether combining two weak players would make one strong one. Bratzel observed that both automakers are struggling in areas like electric vehicles and software-defined cars, making it uncertain whether they can overcome their weaknesses with a merger.
Source: https://www.forbes.com/sites/neilwinton/2024/12/18