Honda Nissan Merger To Take On Japanese Auto Giants, To Compete With Tesla In EV Market.

According to reports, Honda and Nissan are considering partnering to combat fierce rivalry from both domestic and international rivals, which is a significant move in the automotive industry from the land of the rising sun. As rivalry disrupts the global sector, this would enable them to share more resources.

At a time when the industry is being revolutionised by companies like Tesla and Chinese competitors for more battery-centric mobility solutions, the two automakers would be able to collaborate more closely on technology if the negotiations, which are likely in the early stages, are successful.

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The goal of the talks is to establish an umbrella organization that will house Nissan and Honda. Whether the new joint venture will eventually create a full merger between the two businesses is not quite clear. For automakers, the changing EV market poses serious obstacles, including as intense competition and a decline in demand in the US and Europe. In recent months, these two automakers have responded by deepening their alliance.

Separate sources, however, indicate that a third Japanese carmaker is joining Nissan and Honda in this combination. Although negotiations are still in their early phases, Mitsubishi may join this coalition as a third party. It should be mentioned that Nissan, Mitsubishi, and Renault have been a member of a worldwide organization for more than ten years.

This trend coincides with growing demand for EVs in China, which has caused Honda and Nissan, Japan’s second and third-largest automakers, respectively, behind Toyota, to lose market share. Up to November 2024, 70% of the world’s EV sales came from China.

The Japanese stock market has been significantly impacted by these changes. Honda’s stock fell more than 1% in early trading, while Nissan’s increased more than 20%. Nissan is the largest stakeholder in Mitsubishi Motors, which saw a 14% increase. On the Tokyo Stock Exchange, Honda’s stock fell 4% to JP¥ 1,232, while Nissan Motor’s shares rose up to 24% to an intra-day high of JP¥ 417.60.

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Although no decisions have been taken, Nissan, Honda, and MMC have stated in March and August of this year that they are evaluating a number of potential future partnership opportunities.