Japanese car manufacturers Nissan and Honda have confirmed that they are in talks to strengthen their collaboration, but have denied reports pointing to a merger.
The share price of nissan was shot almost 24% in Tokyo after meeting, citing anonymous sources, that could merge with Honda to form the third largest automobile group in the world. This is the company’s biggest leap in the last 50 years. By contrast, Honda shares they fell around 3%.
According to reports, mitsubishia member of Nissan’s alliance, was included in the talks, and the idea boosted the automaker’s stock almost 20%in its biggest rise since 2013.
The three Japanese automakers announced in August that They planned to share components for electric vehiclessuch as batteries, and jointly research software for autonomous driving in order to better adapt to the drastic changes in the automotive industry focused on electrification.
In March, it was announced a preliminary agreement between HondaJapan’s second largest automobile manufacturer, and nissanthird. Trading in Nissan shares was suspended but resumed after the companies jointly issued a statement saying they were “studying various possibilities for future collaboration, but no decision has been made“.
How would a merger help Japanese manufacturers?
A merger could lead to a giant valued at about 55,000 million dollars (52,400 million euros) if the market capitalization of the three car manufacturers is taken into account.
Joining forces would help the two companies grow to compete with Toyotathe Japanese market leader, and with Germany’s Volkswagen, at a time when the rise of Chinese automakers is shaking up the industry and manufacturers are struggling to shift from fossil fuel-powered vehicles to electric ones.
Nissan maintains an alliance with Renault SA being reviewed. Last month, Nissan announced it was cutting 9,000 jobs, about 6% of its global workforce, and reducing its global production capacity by 20%, after posting quarterly losses of 9.3 billion yen (58, 1 million euros).
Earlier this month, Nissan reorganized its management team and its CEO, Makoto Uchida, salary was cut by 50% to take responsibility for financial problems. Uchida said Nissan needed to be more efficient and more responsive to market tastes, rising costs and other global changes.
Honda reported that Their profits were reduced by almost 20% in the first half of the April-March fiscal year compared to the previous year, as sales slowed in China.
Toyota manufactured 11.5 million vehicles in 2023, while Honda produced 4.2 million and Nissan, 3.4 million. Mitsubishi Motors manufactured just over a million. Even after a merger, Toyota would remain the largest Japanese automaker.
Add Comment