In recent years, the global automotive industry has faced fundamental changes. The emergence of electric cars and increased competition from Chinese companies has put a lot of pressure on traditional car manufacturers. According to a Reuters report, news of the negotiations between the two Japanese automobile giants, Honda and Nissan, regarding the merger of the aforementioned companies, has been published, which could bring about a major change in the industry.
The increasing competition of Chinese manufacturers of electric cars is one of the main factors of this possible decision. In 2023, Honda and Nissan will sell a combined 7.4 million vehicles globally. Meanwhile, companies like BYD are developing and conquering the market at a remarkable speed, especially in China. This competitive pressure has faced a serious problem for traditional brands such as Honda and Nissan, who are trying to make a profit from their investments in the electric vehicle sector.
Losing market share in China as the world’s largest electric car market is another concern for the two mentioned companies. In November, about 70% of global electric car sales (equivalent to more than 1.27 million units) were recorded in China. This statistic shows that focusing on the Chinese market is critical for success in the field of electric vehicles.
Honda and Nissan have already collaborated in the field of electric cars; So much so that in March, they agreed to collaborate on electric vehicles, and a few months later, the two companies deepened their relationship by collaborating on the development of batteries, electric axles and other technologies. According to some experts, previous collaborations have paved the way for a possible merger.
Honda and Nissan are said to be planning to operate under a single holding company, and the two Japanese companies are expected to sign a memorandum of understanding soon to create a new holding company. Also, Honda and Nissan plan to put Mitsubishi Motors, of which Nissan is the main shareholder with a 24% stake, under this holding company, thus creating one of the largest automotive groups in the world.
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The exact details of the possible merger between Honda and Nissan have not yet been determined; Therefore, it is not possible to know the exact amount of shares and the responsibility of the implementation of each company in the new holding. However, any deal could be the biggest deal in the auto industry since the $52 billion merger between Fiat Chrysler and PSA in 2021 to create Stellantis Holdings.
The mentioned reports have not been officially confirmed; But they indicate important changes in the automotive industry. The merger of Honda and Nissan can help them to deal with the problems caused by the increasing competition in the car market, especially in China, and consolidate their position in this growing market.
