Can a Nissan-Honda Merger Work? No, Says Carlos Ghosn
The auto industry is abuzz with conversation about the confirmation that Nissan and Honda—and possibly Mitsubishi—are discussing a possible merger or partnership. Among those adding their voice to the discussion is former Nissan head Carlos Ghosn, who did so in a series of odd online interviews from his self-imposed exile in Lebanon.
You likely won’t be surprised by what the obviously bitter former executive has to say. For instance, the story that Bloomberg ran is titled, “Carlos Ghosn Predicts a Reckoning for Car Industry ‘Weaklings’.” And he isn’t necessarily talking just about Nissan and Mitsubishi; he’s convinced that big companies, like the Taiwan-based electronics giant Foxconn, which is interested in Nissan, will soon swallow up smaller auto manufacturers.
As for Nissan and Honda, Ghosn termed the merger talks a “desperate move.”
“It’s not a pragmatic deal because frankly, the synergies between the two companies are difficult to find,” he said in the videotaped interview. “There is practically no complementarity between the two companies. They are in the same markets. They have the same products. The brands are very, very similar. At the end of the day they are trying to marry the short-term problems of Nissan, and the long-term vision of Honda.” He said that he believes Honda is being pushed into a possible merger by the Japanese government’s Ministry of Economy, Trade, and Industry.
In a separate press conference held today, Ghosn doubled down. “If this merger takes place,” he said, “personally I don’t think it’s going to be successful.” The companies are “surrendering in a certain way, in panic mode, by saying, ‘Please help us,’” Ghosn said.
All this must be taken with a grain of salt, as Ghosn, 70, definitely has an axe to grind. You’ll recall that the former CEO and chairman of the Renault-Nissan-Mitsubishi group was arrested and charged with financial crimes in Japan in 2018, and jumped his $14 million bail and fled the country in December of 2019.
He escaped Lebanon hidden in a three-foot musical equipment case on a private jet in December of 2019. Last year Ghosn filed a $1 billion lawsuit against Nissan for multiple charges, including spreading “misinformation” about him. The suit is pending.
Despite his bitterness towards his former company Ghosn might be right. I don’t see where Honda benefits from grabbing these two companies. Honda is better of the three companies and other than grabbing truck technology from Nissan I am not sure what they gain.
The healthy coming to aid of the sick in this case may make both parties terminal. Nissan caused their own problems. Their cars are basically a fight for the cheapest lease payment. And I’m an old Z car owner!
Honda needs help to fund the future but Nissan has little to offer. Added Volume at best but not much else.
Companies will still be faced with EV tech to sell in various markets and that is how they will maintain volume.
I suspect companies at sone point will default to engineering, design and styling. They will in time farm out production to companies like Foxconn that will mfg the cars for any customer.
Many products today are engineered and developed by a company but mfg is left to an independent contractor.
This will take but much of what we use Todsy is going this way.
Apple makes no phones but independent contractors make them for Apple. Even using Samsung screens. This type formula may be the way forward.
The other thing is that some automakers may be purchased by larger corporations like Hyundai that builds and sell everything from ships to toasters.
The formulas have to change as what they are doing now is not going to keep working.
Honda + GM makes more sense but I get the feeling a few people are trying to keep their nations car business contained –so more Hyundai/Kia rather than Stellantis?
Honda gains frame on body trucks (and SUV?) out of this. Nissan’s edge (over Honda) down the EV path. Nissans sport car cred (if they want to tap that) and Mitsubishi. There are markets where Nissan and/or Mitsubishi are significant players and ahead of Honda in sales. I suspect Infiniti is wiped away by this merger.
Honda is smart enough not to do a GM and market a bunch of overlapping product in the same market.
Honda and GM as independent partners on tech but not as in merger.
Honda wants to remain independent to decide its own path in any deal just as GM.
Also you may be right as culture of these companies can be destructive Daimler, Fiat and now Stillantis has been destructive. They will always favor their priority brand.
Nissan is on the way down and out ( and shout out to Infinity when it gets there.) Honda is going to get mixed up for no real gain. Cripe, just license the technology. Porsche did for the 944 engine’s balance shafts which was the smartest move ever. As Mike said, Nissan and Mitsubishi duke it out every sale for the lowest lease. Every other year we read about Mitsubishi Finance and their horrific books. Move on Honda. They might fail, but at least Honda will be responsible for Honda. (Packard looking at you right now)
He should get back in his packing case.