Enough to compete with their rivals. Japanese auto giant Honda said on Wednesday it was exploring the possibility of a merger with struggling compatriot Nissan. A rapprochement which could allow them to better compete with Tesla and their Chinese rivals in the electric sector.
Already associated in a “strategic partnership”, the two Japanese manufacturers will begin talks with a view to coming together under the leadership of a “single holding” company, by June 2025. They will soon sign a memorandum of understanding , reported the Nikkei business daily.
“As we announced in March and August, we are discussing possibilities for cooperation in many areas” and a possible merger “is among the possibilities”, reacted a Honda spokesperson to AFP. “But nothing has been decided,” he insisted. “Honda and Nissan are exploring various possibilities for collaboration, to leverage their respective strengths,” Nissan simply responded.
“No meaning” for Carlos Ghosn
Carlos Ghosn, Nissan’s ousted ex-boss, said Monday that the struggling Japanese automaker was in “panic mode, begging its long-time enemy Honda.” “Frankly, I wonder how this is going to work,” the Franco-Lebanese-Brazilian septuagenarian, on the run in Lebanon, told reporters in Tokyo by video link. He said he was “not absolutely convinced that (Nissan) has the talent necessary to meet the challenges it faces.”
He also said he was “surprised” by the news of this merger because “there is no complementarity” between Nissan and Honda, whose strengths and weaknesses are in the same areas. “From an industrial point of view, there are duplicates everywhere. So it doesn’t make sense to me,” he snapped. Although the two companies may be able to “find synergies for the future, I don’t see anything obvious in this partnership or alliance.”
Honda and Nissan are respectively second and third Japanese automaker behind Toyota. They plan to include Mitsubishi Motors – of which Nissan is the main shareholder – within the holding company, to give birth to one of the largest automobile groups in the world behind their compatriot Toyota and the German Volkswagen, specifies the Nikkei.
Between them, they sold 4 million vehicles in the first half, which remains well below the 5.16 million sold by Toyota, the world number one. The “main focus” of the talks is between Nissan and Honda, with Mitsubishi’s involvement being “at a different level”, the Honda spokesperson said.
Nissan in difficulty
This merger project, if it is confirmed, comes at a time when all Japanese manufacturers are seeking to quickly strengthen their position in the electric sector – a market whose global takeoff, especially in China and Europe, has overtaken them.
It also comes at a time when Nissan is experiencing deep difficulties: the group announced at the beginning of November that it would cut 9,000 positions from its global workforce and cut its production capacities to adapt to a clear decline in its sales.
The group is in sharp decline in its flagship markets, in the United States and especially in China, where its sales collapsed by 13% over July-September in the face of fierce competition from Chinese brands in the electric sector. Honda, for its part, due to lack of critical mass, is struggling to develop technologies for electrification.
In Japan, even if the electric wave is weaker than elsewhere, the market historically dominated by local brands is now shaken by the American Tesla, the arrival of the Chinese electric champion BYD and the return of the South Korean Hyundai, again with electrified vehicles.
Nissan shares were temporarily suspended on the Tokyo Stock Exchange on Wednesday before taking off: they climbed 23.69% around 04:15 GMT, reaching the maximum ceiling. At the same time, Mitsubishi climbed 19.64% and Honda fell 2.80%.