An earthquake shakes the Japanese automobile industry: Honda and Nissan are negotiating a historic merger that could redefine the global landscape of the sector. A new giant in sight for 2024?
A major upheaval is brewing in the Japanese automobile industry. On Monday, December 23, senior executives from Honda and Nissan announced at a press conference in Tokyo that they were considering a thorough integration of their activities. This alliance could create the third largest automobile manufacturer in the world.
Although the precise details remain to be defined, the two manufacturers have signed a memorandum of understanding and have given themselves until June 2024 to finalize this historic merger. Bosses Toshihiro Mibe (Honda) and Makoto Uchida (Nissan) have cautiously avoided the term “merger” so as not to worry their employees, preferring to speak of “integration of activities”.
A marriage of convenience in the face of the challenges of the sector
This alliance is part of a context of profound change for the global automobile industry. Faced with accelerated electrification, the autonomous driving revolution and fierce competition from new tech players, traditional manufacturers are seeking to join forces.
Honda and Nissan, eternal rivals in their home market, are facing growing pressure. Their market shares are crumbling, particularly in China and the United States, while their profitability is eroding. A merger would allow them to pool development and production costs in future technologies.
Promising complementarities
According to sources close to the matter, Honda and Nissan plan to collaborate closely on electric vehicles, hydrogen, but also software and connected mobility services. Each would bring their strengths:
- Honda, its mastery of alternative engines and its advance on hydrogen
- Nissan, its leadership in electric cars with its Leaf and its batteries
Synergies could also be found in factories, logistics or purchasing. The objective would be to reduce costs by 30% by 2025. Common vehicle platforms could emerge.
The future of the Renault-Nissan Alliance in question
This Honda-Nissan project raises questions about the future of the Alliance between Renault and its Japanese partner. Already weakened since the Carlos Ghosn affair, the links between the two groups could weaken further if Nissan moves closer to Honda.
Nissan has always looked at Honda with envy and admiration. A marriage between them would be more culturally natural than with Renault.According to an automotive industry expert who requested anonymity
Renault did not wish to officially comment on this announcement, contenting itself with a laconic “We are following developments in the industry with interest”. But internally, concern is growing to see Nissan move away, even as the French manufacturer is preparing to list its electric division on the stock market.
Towards a recomposition of the Japanese automotive landscape
If it comes to fruition, the Honda-Nissan alliance will shake up the cards in Japan and beyond. Toyota, the undisputed leader, would see a major challenger emerge on its territory. Japanese equipment manufacturers should also review their positions.
The manufacturer Mitsubishi, partner of Nissan, could be tempted to join the future entity. His boss was also present at the press conference, even if he gave himself one more month to decide. A three-way merger would create a new empire of more than 10 million vehicles per year.
The coming months will therefore be decisive in knowing whether this marriage between Japanese giants will be consummated and under what conditions. But one thing is certain: the announced big bang risks shaking the entire Japanese automotive ecosystem and reshuffling the cards of global competition.
Honda and Nissan, eternal rivals in their home market, are facing growing pressure. Their market shares are crumbling, particularly in China and the United States, while their profitability is eroding. A merger would allow them to pool development and production costs in the technologies of the future.
Promising complementarities
According to sources close to the matter, Honda and Nissan plan to collaborate closely on electric vehicles, hydrogen, but also software and connected mobility services. Each would bring their strengths:
- Honda, its mastery of alternative engines and its advance on hydrogen
- Nissan, its leadership in electric cars with its Leaf and its batteries
Synergies could also be found in factories, logistics or purchasing. The objective would be to reduce costs by 30% by 2025. Common vehicle platforms could emerge.
The future of the Renault-Nissan Alliance in question
This Honda-Nissan project raises questions about the future of the Alliance between Renault and its Japanese partner. Already weakened since the Carlos Ghosn affair, the links between the two groups could weaken further if Nissan moves closer to Honda.
Nissan has always looked at Honda with envy and admiration. A marriage between them would be more culturally natural than with Renault.According to an automotive industry expert who requested anonymity
Renault did not wish to officially comment on this announcement, contenting itself with a laconic “We are following developments in the industry with interest”. But internally, concern is growing to see Nissan move away, even as the French manufacturer is preparing to list its electric division on the stock market.
Towards a recomposition of the Japanese automotive landscape
If it comes to fruition, the Honda-Nissan alliance will shake up the cards in Japan and beyond. Toyota, the undisputed leader, would see a major challenger emerge on its territory. Japanese equipment manufacturers should also review their positions.
The manufacturer Mitsubishi, partner of Nissan, could be tempted to join the future entity. His boss was also present at the press conference, even if he gave himself one more month to decide. A three-way merger would create a new empire of more than 10 million vehicles per year.
The coming months will therefore be decisive in knowing whether this marriage between Japanese giants will be consummated and under what conditions. But one thing is certain: the announced big bang risks shaking the entire Japanese automotive ecosystem and reshuffling the cards of global competition.
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