Honda, Nissan Discuss Possible Merger

Nissan CEO Makoto Uchida with Honda CEO Toshihiro Mibe at a press conference in March. 

Two of the world’s largest automakers — Honda and Nissan — are said to be discussing deepening their ties and even merging. 

According to a report in the Nikkei newspaper, the two companies are considering operating under a holding company, and could soon sign a memorandum of understanding.

“The merger talks between the two storied Japanese giants highlight the intense upheaval within the world’s auto industry, as carmakers grapple with expensive technological shifts, political instability and the rise of fast-growing Chinese rivals,” according to The New York Times. “Though discussions are still at an early stage, the thinking at Nissan and Honda is that combining forces could provide the companies with the resources and scale necessary to navigate those immense pressures.”

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The automakers reportedly plan to eventually bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company.

"Nissan shares were last trading up 23.7%, while Honda shares slipped 3%,” according to CNBC. “Back in November, Nissan had posted downbeat results for its second quarter ended September, and slashed its full year revenue and operating outlook. The automaker also announced plans to slash 9,000 jobs and cut global production capacity by a fifth amid fierce competition in its major markets.”

In March, the two automakers announced that they would partner on electric vehicles and in August said they would collaborate on battery technology.

“Although both companies offer EVs and plug-ins – Nissan, in particular, was a pioneer in EV technology – Chinese brands like BYD have eclipsed their technology and are priced more cheaply,” according to CNN Business. “Nissan has also struggled since its former CEO, Carlos had a Ghosn, became a fugitive, fleeing Japan for his native Lebanon. Ghosn was arrested in Tokyo in 2018 on suspicion of financial misconduct, and Nissan fired him. Ghosn has repeatedly denied the charges.”

Honda and Nissan have not denied the talks, but said it was "not something that has been announced by either company,” according to the BBC

A combined Honda and Nissan would create a $54 billion company with annual output of 7.4 million vehicles, making it the world's third-largest auto group by vehicle sales after Toyota and Volkswagen, notes Reuters

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