Japanese automotive giants Honda and Nissan are in talks over a potential merger that could create a £54billion company, making it one of the largest in the world.
As traditional automakers contend with fierce competition from electric vehicle (EV) leaders like Tesla and fast-growing Chinese brands, this alliance represents a strategic response to persistent market challenges. A successful merger could also signify a major transformation in Japan's automotive industry, setting a powerful example for others to follow.
The move comes as both firms face mounting pressure from Tesla and Chinese rivals to ramp up production in the electric vehicle market. The discussions, revealed today by Reuters, mark a significant shift in Japan's automotive landscape and include exploring ways to deepen existing ties between the two manufacturers. Nissan and Honda have previously joined forces to develop EV technology. Such a merger would represent one of the largest automotive deals since the £52billion merger between Fiat Chrysler and PSA in 2021.
Honda sold 3.98 million vehicles globally in 2023, while Nissan's sales reached 3.37 million vehicles. A merger would provide the Japanese Car Manufacturers with a potential annual output of 7.4 million vehicles, surpassing the current third-place holder, Hyundai and Kia group, which sold 7.31 million vehicles last year.
Nissan previously pioneered mass-market electric vehicles with the Leaf, however the car giant has struggled more recently. Nissan has seen an 85 per cent plunge in second-quarter profits due to slumping sales both in China and the US. Last month, Nissan announced a £2.6billion cost savings plan that includes cutting 9,000 jobs. Meaning that any potential merger between these historical competitors could be as much about saving Nissan, as it is about protecting their market positions.
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