TOKYO (Source : AP)— Nissan Motor Corp. and Honda Motor Co. confirmed on Wednesday that they are exploring closer collaboration but denied reports that they have decided to merge. The announcement followed a dramatic 24% surge in Nissan’s stock price after rumors surfaced about a potential merger that could create the world’s third-largest automaker. In contrast, Honda’s stock fell by as much as 3%.
The two companies, along with alliance member Mitsubishi Motors Corp., issued a joint statement clarifying that while they are discussing various possibilities for collaboration, no merger decision has been made.
The discussions come as the global auto industry faces increasing pressure, particularly from Chinese automakers like BYD and Nio, which are gaining market share with affordable electric vehicles (EVs). As traditional automakers struggle to shift from fossil-fuel vehicles to electric ones, Nissan, Honda, and Mitsubishi have been looking to share resources. In August, the trio announced plans to collaborate on electric vehicle components and autonomous driving technology.
A merger between Nissan and Honda, which would also involve Mitsubishi, could create a $55 billion auto giant. This consolidation could help the companies compete with Japan’s market leader, Toyota, and global rivals like Volkswagen. However, experts note that Toyota’s scale and partnerships with Mazda and Subaru would still make it the dominant force in Japan.
Challenges for Nissan and Honda
Nissan, which has been struggling with profitability, recently announced plans to cut 9,000 jobs and reduce global production capacity by 20%. The company has also faced financial setbacks, including a recent loss of ¥9.3 billion ($61 million) and a downgrade of its credit outlook. Meanwhile, Honda’s profits have dropped nearly 20%, driven by weaker sales in China.
Despite these challenges, analysts believe that a partnership or merger could benefit both automakers, particularly in areas like electric vehicle development. Nissan’s experience with EVs and hybrid powertrains could help Honda strengthen its electric lineup, while Nissan’s larger vehicles, such as SUVs, could fill gaps in Honda’s offerings.
The global automotive landscape is shifting due to increased competition, rising costs, and changing consumer preferences. In particular, the growing trend toward more affordable vehicles is forcing automakers to reconsider pricing strategies. Analysts warn that increased tariffs, supply chain disruptions, and the ongoing electrification transition are putting additional pressure on manufacturers like Nissan and Honda.
While a potential merger remains uncertain, the ongoing discussions highlight the need for Japanese automakers to adapt and scale in a rapidly changing market.
