Japanese auto giant Honda said on Wednesday it was exploring the possibility of a merger with struggling compatriot Nissan, following media reports, a merger that could allow them to better take on Tesla and its Chinese rivals in the power sector. Already associated in a “strategic partnership”, the two Japanese manufacturers will begin talks with a view to uniting under the direction of a single holding company and will soon sign a memorandum of understanding, the Nikkei business daily reported.
“As we announced in March and August, we are discussing possibilities of cooperation in many areas” and a possible merger “is among the possibilities,” a Honda spokesperson reacted to AFP.
“But nothing has been decided,” he insisted.
Honda and Nissan are respectively the second and third largest Japanese automakers behind Toyota. They plan to include Mitsubishi Motors, of which Nissan is the main shareholder, within the holding, to give rise to one of the largest automobile groups in the world behind its compatriot Toyota and the German Volkswagen, the Nikkei specifies. Between them, they sold 4 million vehicles in the first half, a figure well below the 5.16 million sold by Toyota, the world’s number one.
The “main focus” of the talks is between Nissan and Honda, while Mitsubishi’s involvement is “at a different level,” the Honda spokesperson said. Nissan’s stock was temporarily suspended on Wednesday on the Tokyo Stock Exchange before taking off: it rose 23.69% around 05:15 (French metropolitan time), reaching its maximum ceiling. At the same time, Mitsubishi rose 19.64% and Honda fell 2.80%.
“Various collaboration possibilities”
“Honda and Nissan are exploring various collaboration possibilities to leverage their respective strengths,” Nissan responded simply. Honda and Nissan had already announced in March a memorandum of understanding for a “strategic partnership”, particularly in the electrical sector, to collaborate on software platforms, components for electrified vehicles and other complementary products.
This merger project, if confirmed, comes at a time when all Japanese manufacturers are seeking to quickly strengthen their position in the electrical sector, a market whose global takeoff, especially in China and Europe, has surpassed them. It also comes at a time when Nissan is going through deep difficulties: the group announced in early November that it would eliminate 9,000 positions from its global workforce and cut its production capacities to adapt to a sharp drop in its sales.
The group suffers a sharp decline in its emblematic markets, in the United States and especially in China, where its sales plummeted 13% in July-September due to the fierce competition from Chinese brands in the electrical sector. Honda, for its part, due to a lack of critical mass, is struggling to develop technologies for electrification.
Source: BFM TV
