Honda and Nissan are considering a merger. Japanese carmakers want to be able to compete better with Chinese electric vehicle (EV) manufacturers this way, but so does the also Japanese Toyota.
At least, that is what the Japanese business newspaper Nikkei reports. Nissan and Honda have confirmed that they have signed a memorandum of understanding setting out that the parties will begin talks on a merger. Nissan has been facing difficulties for some time. In early December, the Financial Times reported, citing a source close to Nissan’s management, that the car manufacturer fears it could go bankrupt within twelve to fourteen months. Disappointing sales figures in markets including the United States, China and Japan are said to be among the underlying causes.
Renault unwinds stake
In addition, Renault wants to wind down its stake in Nissan. The French car company has worked with Nissan since 1999, when it saved the Japanese carmaker from financial ruin. Nissan has to look for a new investor due to this decision. Honda was also mentioned as a potential new shareholder in early December.
Honda is also struggling to stand up to Chinese competition, among others, especially in EVs. Chinese companies like BYD are firmly entering this market, causing many traditional car brands including Honda to lose ground in China.
No strangers to each other
Honda and Nissan are no strangers to each other; the companies announced back in March that they want to produce technologies for EVs together. These include software and batteries. Mitsubishi, also Japanese, also became involved in this collaboration in August.
"Through the collaboration between the three companies, we expect the partnership to evolve into something that creates more value, and to provide unique products and services that meet customers' diverse needs," Nissan CEO Makoto Uchida said at the time about this new alliance.
'Later possibly Mitsubishi also involved'
Whether it will actually come to a merger between Honda and Nissan is not certain, by the way. The parties are still negotiating the plans. At a later stage, Mitsubishi may also be involved in the joining of forces. Honda, Nissan and Mitsubishi have signed a memorandum of understanding for this too.
Reuters reports, citing a source, that the parties intend to create a new joint holding company, which would encompass both Honda and Nissan. Reuters reports that it is unclear whether this will eventually lead to a full merger of the car brands.
Author: Wouter Hoeffnagel
Image: Patrik Houštecký via Pixabay
