Honda and Nissan were poised Monday to announce the start of talks on a merger to help the Japanese giants catch up with Chinese rivals and Tesla on electric vehicles.
Their collaboration would create the world's third largest automaker, expanding development of EVs and self-driving tech while coming to the rescue of struggling Nissan.
The pair have not released any details publicly but it was widely reported in Japanese media that they would sign a memorandum of understanding on Monday afternoon.
Honda and Nissan -- Japan's number two and three automakers after Toyota -- are aiming to finalize a merger deal in June 2025, several media outlets said.
Mitsubishi Motors, which could join the new holding company early next year, is also expected to take part in Monday's announcement, after Honda and Nissan hold board meetings.
In the morning, the presidents of Honda, Nissan and Mitsubishi Motors told the industry and transport ministries of their plan to start negotiations, Kyodo News reported.
Honda and Nissan's partnership could include a manufacturing tie-up where they build vehicles at each other's plants, Kyodo said, citing sources close to the matter.
Lackluster consumer spending and stiff competition in several markets is making life hard for many automakers.
Business has been especially tough for foreign brands in China, where electric vehicle manufacturers such as BYD are leading the way as demand grows for less polluting vehicles.
China overtook Japan as the biggest vehicle exporter last year, helped by government support for EVs.
"We hope Japanese companies will take steps to respond to these changes and take measures to survive and win amid international competition," top government spokesman Yoshimasa Hayashi said Monday.
He declined to comment on the merger reports but highlighted the "importance of strengthening competitiveness in areas such as... batteries and in-vehicle software".
Debt-laden Nissan last month announced thousands of job cuts as it reported a 93 percent plunge in first-half net profit, making a merger with Honda welcome news.
But Taiwanese electronics manufacturer Foxconn has also reportedly sensed an opportunity.
Foxconn, which builds devices for tech companies including Apple's iPhones, first unsuccessfully approached Nissan with a bid to acquire a majority stake, according to Bloomberg.
Then a Taiwanese media outlet said Foxconn's Jun Seki -- a former Nissan executive -- had visited France to ask Renault to sell its 35 percent share of Nissan, although reports later said this pursuit had been put on pause.
Honda and Nissan had already agreed in March to explore a strategic partnership on software and components for EVs among other technologies.
This partnership was joined in August by Mitsubishi Motors, of which Nissan is a majority shareholder.
Nissan has weathered a turbulent decade, including the 2018 arrest of former boss Carlos Ghosn, who later jumped bail and fled Japan concealed in a music equipment box.
Kyodo said that Honda would ask Nissan to achieve a "V-shaped recovery" in performance as a condition for the merger.
© 2024 AFP
15 Comments
Login to comment
CAPTAIN
RIP Honda. Nissan is the cancer that's take them down.
Mr Kipling
A desperate attempt by Japan to help its car industry against the rise of China. Since 2000 Japanese car production has fallen from 20% of the worlds cars to 12% while China has risen from less than 2% to 39%. A trend which is going to continue.
Dango bong
what if Ford came in to buy Honda like Nippon Steel is trying to buy US Steel? That would be funny
Jay
Nissan, marred by their shoddy vehicles, scandals and gross mismanagement, is the corporate equivalent of dead weight. Why should Honda, a company that has consistently produced reliable vehicles whose engines and transmissions rival those of Toyota, hitch its future to a sinking ship?! This reeks of globalist interference trying to consolidate power and destroy competition, forcing strong companies to prop up failing ones under the guise of "synergy."
Honda: it's not too late. Stay true to your roots and reject this disastrous partnership before you're dragged into the muck of mediocrity.
Jay
Ford until quite recently owned a significant stake in Mazda, so it's not beyond the realm of possibility for the legendary Henry Ford, a man as healthy and vibrant as Detroit itself.
garymalmgren
the legendary Henry Ford, a man as healthy and vibrant as Detroit itself.
Good one Jay, Considering that old Henry is dead and gone!
koiwaicoffee
Meaning: Japan Inc has approved the merge and it's already settled.
Jim
Nissan is a parasite which infects and causes collapse of everything it touches!
blackpassenger
Die, Nissan. Dieeee already. Honda San, remember: if u lay with dogs, u’ll rise with fleas. Can’t say u haven’t been warned
Jay
Just like Detroit, unfortunately.
Jimizo
Hehe.
Ford didn’t have the healthiest mind either. A bit too sympathetic to Nazi ideology from the sounds of it.
Jay
Oh, come on now. Next, you'll be telling us Uncle Henry invented the Model T just to drive straight to a book burning! Let's stick to the facts: he was too busy building cars and assembly lines to mastermind global conspiracies. Ford was the real pioneer of the auto industry, unlike this Musk fellow and his arty-farty Tossla EVs.
Jimizo
Come on what? His anti-semitism was pretty vile and there to see.
Erm, no. He was a manufacturing pioneer and a raging anti-Semite.
What part of this are you struggling with?
Mr Kipling
Do some research into where the future growth in car sales is. And which country is best placed to exploit that growth? By 2040 China will have 50% of the global car market.
OssanAmerica
Chinese cars may dominate the market eventually because of the huge domestic market. To be honest, while most Americans may buy inexpensive products made in China, I don't see them buying made in China cars. Especially as the US has clearly shown that there will be a tariff wall from one administration to another. The geopolitical differences between the US and China are too great to ever reach the US-JPN level with Japanese car factories in the United States.
Nissan has and still makes great cars. As does Honda, which has more appeal overseas than domestically. This merger if concluded will ensure a continuing competitive presence. Bashing Nissan is the same as bashing Ospreys.