Honda and Nissan Explore Potential Merger to Compete in Electric Vehicle Market
Islamabad:Honda and Nissan have engaged in preliminary talks regarding a potential merger to better compete against electric vehicle (EV) manufacturers, particularly in China. The discussions are still in early stages, and there is no guarantee that an agreement will be reached, according to BBC reports.
Both Japanese automakers have stated that they are exploring various cooperation opportunities to leverage each other’s capabilities for future collaboration. They added that any significant developments would be shared with stakeholders at the appropriate time.
In response to a report by Bloomberg, Nissan declined to comment on claims that Apple had approached Foxconn about taking a controlling stake in the car manufacturer. Foxconn, however, also refrained from making any immediate remarks on the matter.
The potential merger between Japan’s second- and third-largest automakers could be complex for several reasons. A deal would likely face intense scrutiny in Japan due to concerns about significant job cuts. Moreover, there are speculations that Nissan’s existing alliance with French automaker Renault could be impacted by such a merger.
In March, Nissan and Honda agreed to collaborate on their EV businesses, and in August, they further deepened their partnership by agreeing to work together on battery technologies and other innovations. They also announced talks with Mitsubishi Motors in August to explore collaboration on electric and intelligence technologies.
Nissan, the largest shareholder in Mitsubishi, could eventually involve the company in any potential partnership.
Shares of Nissan rose by more than 23% on Wednesday in Tokyo, while Honda’s stock dropped by nearly 3%, and Mitsubishi’s shares saw an increase of about 20%.
This strategic exploration comes at a time when car manufacturers are facing growing competition as the industry transitions from petrol and diesel vehicles to electric ones, with production in China on the rise. Honda and Nissan are losing market share in China, which accounted for nearly 70% of global EV sales in November. While both brands sold a combined total of 7.4 million vehicles globally in 2023, they are struggling to compete with cheaper EV makers like BYD, which surpassed Tesla in revenue for the first time in October.