- Honda and Nissan face competition from Tesla and Chinese EV makers
- No merger announced, companies exploring collaboration
- Potential merger could face U.S. scrutiny and require concessions
TOKYO, Dec 18 — Honda Motor Co. and Nissan Motor Co., facing increased competition from electric vehicle (EV) makers, are finalizing plans to start management integration talks, a source said on Dec. 18. They are likely to consider creating an umbrella holding company to control the two automakers, rather than pursuing an outright merger.
Mitsubishi Motors Corp. could join the alliance, potentially creating a major automotive group with annual sales exceeding 8 million vehicles. If Honda and Nissan move forward with negotiations, they are expected to discuss ownership shares of the proposed holding company and other details.
“We are discussing all the possibilities,” Honda President Toshihiro Mibe said on Dec. 18, referring to Honda, Nissan, and Mitsubishi. “We will make an announcement if something is decided.” Nissan also released a statement the same day, confirming that the companies are exploring various possibilities for future collaboration and will announce any updates at an appropriate time.
Honda and Nissan announced in March that they will collaborate on EVs by developing and jointly procuring common key components, such as batteries. In August, the companies stated that Mitsubishi Motors would join the EV partnership, with Nissan being Mitsubishi’s top shareholder.
Japanese automakers, traditionally strong in gasoline vehicles and gas-electric hybrids, are struggling against emerging EV producers, led by Tesla of the United States and BYD of China. In China, where EVs are gaining market share, both Honda and Nissan closed factories after vehicle sales fell sharply. Honda also reduced its workforce there.
Nissan has also been performing poorly in the United States, where its product lineup lacks hybrid vehicles, which are popular in the country. The company announced it would shed 9,000 jobs and cut production capacity by 20 percent after profits fell 90 percent in the six months through September.
At a news conference on Dec. 18, Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on issues related to the individual companies’ management. “We expect that Japanese companies will respond to changes (in their industries) and make efforts to survive international competition,” he said.
(This article was written by Akihiro Nishiyama and Daisuke Matsuoka.)
