NISSAN and Honda might be joining forces in a blockbuster merger that could open doors as the industry moves toward electric vehicles.
The auto giant rivals are reportedly planning to enter negotiations for a massive new collaboration after Nissan has faced financial struggle for months.
The two companies are also reportedly looking to add Mitsubishi Motors to the deal.
News of the possible merger was revealed by Japan’s Nikkei financial newspaper and reported by multiple outlets including Reuters.
The potential merger would make the third-largest auto group by vehicle sales, according to Citi.
The collaboration could offer a way forward for Nissan in the EV field as the brand’s electric rollout has been previously stalled.
Neither company has confirmed the merger.
Nissan and Honda announced in March that they were teaming up to improve their EV development, but Nissan’s financial losses might have made the deal even more urgent.
Nissan revealed in November they were slashing 9,000 jobs as it cut global production capacity by 20%.
The automaker’s President and CEO Makoto Uchida also voluntarily took a massive pay cut due to the dismal Q3 results.
“These turnaround measures do not imply that the company is shrinking,” Uchida said in a statement at the time.
“Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment.
Nissan recently announced that they would be consolidating multiple Infiniti and Nissan showrooms in another merger.
The collaboration with Honda could mark another step in Nissan’s restructuring.
Nikkei reported that talks of the negotiation could start as early as next week.
EXPERTS WEIGH IN
Peter Wells, professor of business and sustainability at Cardiff Business School’s Centre for Automotive Industry Research, told CNBC that the merger is a “traditional solution” to Nissan’s struggles.
Nissan's statement about Infiniti merger
Nissan shared the following statement about Infiniti's merging dealerships with The U.S. Sun:
“In many instances, INFINITI retailers also own a Nissan store in the same market — and in some cases, they’re able to operate cross-brand retail locations,” Nissan spokesperson Ashli Bobo said in a statement.
“Each market is evaluated on a case-by-case basis, and all client-facing operations are guided by full brand separation to maintain the distinct identities of both brands.
“These cross-brand retail locations create opportunities for shared efficiencies, optimize operations, drive showroom traffic for both brands, and strengthen Nissan Group’s presence in key markets.
“At the same time, we remain committed to ensuring clients receive the first-class hospitality they’ve come to expect from INFINITI.”
“My concerns would be that perhaps they have left it a bit late, that they don’t have the current technology and set-up [or] the right product to compete in their key markets,” Wells told the outlet.
“For Nissan particularly, they are out of step with the U.S. market. That’s their major concern, and they cannot fix that very quickly.”
Although the obstacles might be high, the expert said the merger could cut costs, pool assets, and allow the two companies to focus on technological developments for the future.
Citi analyst Arifumi Yoshida predicted the move could hurt Honda, while allowing Nissan and Mitsubishi to grow.
“Given Honda’s competitiveness in motorcycles and [hybrid EVs] and the strength of its brand, we believe it is positioned to take on rivals for the next 5-10 years,” Yoshida said in a research note, according to CNBC.
He added that the decision would be made “in anticipation of the full-scale transformation of the auto industry.”
Neither Nissan nor Honda has responded to The U.S. Sun’s request for comment.
GettyExperts hope that the merger could help Nissan in its EV rollout (stock image)[/caption] Read More Details
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