Honda and Nissan May Merge
Japan’s second- and third-biggest carmakers are holding talks that could seem them come together under a new holding company.
Both Honda and Nissan are facing huge challenges, losing market share in EV-dominant China, facing falling sales and EV mandates in Europe, and potentially increased tariffs in the U.S.A.
The two manufacturers have already announced they would work together on future EVs, with a focus on collaboration on batteries and e-axles, but according to reports things have moved on and a merger is now under discussion.
Nikkei Asia says talks have been accelerated after Taiwan’s Hon Hai Precision Industry (a.k.a. Foxconn) has been trying to acquire a stake in Nissan from France’s Renault. A merger with Honda—which would likely also involve Mitsubishi, as Nissan owns a 24 percent stake—would maintain Japanese ownership. It’s unclear how any deal would impact Renault, which owns 15 percent of Nissan, with the Japanese company owning an equal stake in the French firm.
According to Reuters Honda is currently worth $38.8 billion and Nissan’s market capitalization is $7.6 billion which would make any deal the biggest since Fiat, Chrysler and PSA (Peugeot-Citroën) came together in 2021 to form Stellantis. Honda and Nissan’s sales amounted to 7.4 million vehicles in 2023 and if the two companies did become one they would likely end up as the third-largest manufacturer in the world behind Toyota and VW.
Nikkei Asia suggests that discussions are moving fast, but for now all that Honda and Nissan are saying is, “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths.”
Nissan needs this financially. Honda needs a body-on-frame truck, or at least influence on one. Fingers crossed.
Not a surprise. Nissan has already hit the iceberg. Honda is looking for ways to remain independent in a very difficult market.
Honda needs to increase market share and this is one way. Some reports also have Mitsubishi joining this as they to are very damaged.
The loss of China sales is hitting all. This at a time when few can afford EV lines with the ICE lines.
Toyota and GM both are in ok shape. VW is not well. Hyundai is ok outside major quality issues.
We will see more trouble. Ford is getting a $9 billion dollar loan from the energy department again. They got one back during the bail out of GM and Chrysler too. While it is for the EV programs Ford is broke.
I’m not sure this loan will fix much.
To make things worse the SCOTUS said the Carb states can continue with their own emissions and EV laws. This will kill some companies. That is 44% of the American market.
Best synopsis of the automotive industry I’ve read in a long time, thank you!
General Motors is in serious trouble. Sure, the stock has performed well this year. Most of that is from share buybacks.
They continue to lose market share in the US and in China they are no longer at 15%, more like 6%. They announced 2 weeks ago a $6 Billion write down to close facilities and lay off workers.
The incoming Trump administration could put a 25% tariff on Mexican made autos. GM is the largest manufacturer with 750,000 vehicles in 4 plants there or 1/3 of all production.
Then there is the EV market. They just sold their 3rd battery plant in Lansing to the Koreans. Bkazer and Equinox EV’s are languishing on lots.
Just got out of Cruise to save free cash flow.
Lots of headwinds for Mary.