Honda and Nissan are negotiating a prospective merger that would unite two Japanese automakers who have recently experienced financial difficulties.
The companies said in statement that they have been in talks, but they offered no details or timeframe for when a deal – if one should develop – may be completed. Furthermore, it's unclear what form the potential joint venture may take. The possibility of a possible tie-up was first revealed by Nikkei on Tuesday.
As stated in March, Honda and Nissan are utilizing each other's strengths to explore a range of potential future partnership opportunities, the firms said in a statement on Tuesday. "We will notify our stakeholders at the appropriate time if there are any updates."
Additionally, Honda and Nissan told CNN that Mitsubishi is involved in these first discussions, adding a possible third significant Japanese automaker to the mix. When contacted for comment, Mitsubishi did not reply.
Honda and Nissan declared in March that they would work together on electric cars, and in August that they would work together on battery technologies. However, given the difficulties they have both encountered this year, they might gain by strengthening their bonds.
Like many non-Chinese manufacturers, both businesses have had difficulty in the once-promising Chinese market, which is the largest automobile market in the world. Due to domestic companies' higher perceived worth in the nation, Chinese consumers have mostly switched from swarming to global brands. Incentives have also been offered by the Chinese government to encourage consumers to purchase electric cars and plug-in hybrids more quickly.
Both firms sell EVs and plug-ins, but Chinese brands like BYD have outperformed them in terms of technology and pricing. Nissan, in particular, was a pioneer in EV technology.
Since Carlos Ghosn, the company's former CEO, fled Japan for his home country of Lebanon and became a fugitive, Nissan has also suffered. Nissan sacked Ghosn after he was detained in Tokyo in 2018 on accusations of financial malfeasance. Ghosn has disputed the accusations on several occasions.
The strong automaker alliance between Nissan, Renault, and Mitsubishi was rocked by his removal. Since then, Renault has drastically cut its ownership position in Nissan, crippling the Japanese manufacturer that was once the largest automaking alliance in the world.
According to Nissan, its operating income from March to September was 90% lower than it was during the same time last year.
Honda, which is around five times as big as Nissan, is also having difficulties. By 2040, the business intends to sell solely zero-emission automobiles in major markets. However, the shift has been sluggish since the market for EVs in the US and Europe has been weakened by comparatively cheap gas prices, a lack of adequate charging infrastructure, and heightened competition.
