Nissan and Honda are reportedly one step closer to merging as both automakers supposedly entered the negotiation stage, according to Nikkei and Reuters. Both companies are looking to enter a partnership to pool resources, which would allow them both to become more competitive in the electric vehicle space. The goal would be to increase Nissan’s and Honda’s edge against industry titans like Tesla and some of the rapidly growing Chinese EV manufacturers.
Additionally, Nissan’s been on the hunt for a new partner after word of the automaker’s troubling financial situation surfaced. Just last month, The Financial Times reported that Nissan had just a little over a year’s worth of cash “to survive.” This apparently prompted the Japanese manufacturer to seek out more investor cash as well as a new strategic partner after Renault announced plans to sell some equity shares in Nissan. Both Renault and Nissan have been working together in a joint venture since creating the Renault-Nissan-Mitsubishi Alliance in 1999.
Potential Nissan And Honda Would Focus On EV Development
Nissan and Honda joining forces wouldn’t be a first. Other automakers also recently teamed up with one another to collaborate on researching and developing projects on multiple fronts. For instance, Toyota, Subaru, and Mazda all entered a partnership to codevelop internal combustion engine and electric powertrain technologies earlier this year. Nissan also joined forces with BMW, Ford, and Honda to collaboratively work on developing electric vehicle charging infrastructure. Even Honda themselves entered a partnership with Nissan to collaborate on software development for electric vehicles in August of this year.
But separating the Nissan and Honda merger is the fact that this potential partnership would be more than just a joint-venture to develop technologies. This merger would result in two direct rivals integrating as one entity, breaking down a competitive wall that’s defined the Japanese auto industry since both began making cars decades ago.
According to the reports, should the Nissan and Honda merger happen, the two companies would form and operate under a holding company. The merger could also bring Mitsubishi Motors into the mix, since Nissan is the company’s top shareholder with a 24% stake.
Automakers have been looking into more partnerships and joint ventures in an effort to ramp up their electrification initiatives. Since Chinese-based electric vehicle manufacturers exhibited significant and rapid growth over the past several years, conventional and more established automakers have been feeling the pressure as competition within the electric vehicle space.
“As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” both Nissan and Honda announced in different official press statements. However, neither company confirmed nor denied their ongoing discussions.
Nissan And Honda Joining Forces Would Become Largest Merger Since Stellantis Formation
If Nissan and Honda merge, analysts say the newfound enterprise, along with Mitsubishi, would lead the group to become one of the world’s largest carmakers by sales volumes. The result would be so substantial that the partial consolidation of Nissan-Honda-Mitsubshi would result in the largest automotive merger since Fiat Chrysler Automobiles teamed up with France’s PSA Groupe to become Stellantis in 2021.
However, total sales would still be considerably lower than the largest automaker by sales, Toyota Motor Company, who reportedly sold 11.2 million vehicles just last year. Volkswagen takes second place, having moved 9.2 million vehicles globally.
Source: Nikkei and Reuters
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