Honda and Nissan are set to begin discussions pertaining to an eventual merger, according to Japanese media. While the companies could rival Toyota in size if they were to become a singular entity, it seems more likely that the brands would try to retain some level of independence to avoid some of the issues Nissan faced with Renault. But exactly how this works will ultimately be determined by how the corporate stake holding is negotiated over the coming weeks.
One of the reasons Nissan is seeking a new partnership is because the Japanese leadership has repeatedly found itself at odds with the French side of the business. You may recall how bizarre things got when former Nissan Carlos Ghosn was placed under house arrest for alleged financial crimes, only to flee Japan in an escape that wouldn’t have been out of place in a spy thriller. Corporate leadership within the Renault–Nissan–Mitsubishi Alliance was clearly unstable, with Nissan particularly annoyed with the lack of autonomy it was granted in the relationship.
However, Nikkei Asia has reported that the merger talks have more to do with the Japanese automakers trying to rally against stiffening competition in China. Practically every manufacturer in the world is trying to hold onto market share in Central Asia, now that the region has become the single largest automotive market in the entire world. But Chinese brands have improved immensely in recent years, particularly in terms of all-electric vehicles, and are starting to edge out foreign entities.
It’s assumed that Nissan and Honda, who were already collaborating on EVs, want to further strengthen their ties to do battle on what is inarguably the most lucrative market for electrified vehicles. But they’re likewise supposed to be working together to battle Tesla on both the North American and Chinese markets.
Rumors have yet to be confirmed by either manufacturer, but it’s presumed that Honda and Nissan would operate under a single holding company. A memorandum of understanding for the merger is already said to be in the works, according to Nikkei. It’s assumed Mitsubishi will come along for the ride since Nissan is currently the brand’s largest shareholder, with a 24 percent stake.
Regardless of how things work with Mitsubishi, this will still represent the largest deal to take place within the automotive industry since Stellantis was formed via the merger between PSA Group and Fiat Chrysler Automobiles in 2021. An official announcement is expected from the companies within a matter of days.
[Images: Dimitar Ivanov/Shutterstock]
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Source: The Truth About Cars
