Jan 16 2025
TOKYO: Talks of a potential merger between Honda and Nissan have sparked industry speculation as the two Japanese automakers explore ways to compete with electric vehicle (EV) giants, especially in China.
According to reports, the discussions are still in the early stages, with no guarantee of a deal. The two firms issued a joint statement referencing their earlier announcement in March about exploring EV collaborations. However, they did not deny the merger talks, adding that they would update stakeholders if there were developments.
Sources suggest an official confirmation of these discussions could come as early as next week. The merger, if realised, would combine Japan’s second and third-largest carmakers, creating a stronger position in the EV market. But it wouldn’t be a simple process. Political scrutiny and the potential for job cuts in Japan could be major obstacles. Nissan’s ties with Renault also add complexity to the situation.
Speculation intensified following a Bloomberg report that Nissan was approached by iPhone maker Foxconn for a controlling stake. While Nissan declined to comment, Foxconn has yet to respond.
Honda and Nissan with their merger have already taken steps toward deeper collaboration. In March, they agreed to work together on EVs, later expanding their partnership in August to include batteries and other key technologies. They also teamed up with Mitsubishi Motors to explore EV advancements. Reports suggest Mitsubishi could be included in any future alliance.
Amid these developments, Nissan shares surged 23%, while Mitsubishi saw a 20% jump. Honda shares, however, dipped by 3%.
Experts are divided on the potential merger’s impact. While it could boost competitiveness, some analysts, like Jesper Koll of Monex Group, believe it might be a short-term fix rather than a transformative move for the companies.
-Agencies
