Japanese automakers considering merger in response to Chinese EV market competition, according to reports
Honda and Nissan are said to be considering a merger in order to better compete with the rapidly growing electric vehicle market in China. Read Full Article at RT.com
TroibNews 
Honda and Nissan are reportedly engaged in exploratory discussions regarding a potential merger, as the automotive industry grapples with substantial challenges.
These talks between the two prominent Japanese automakers occur amid fierce competition from Chinese electric vehicle manufacturers and a slower-than-anticipated demand for EVs.
Initial reports of the conversation emerged from Nikkei on Tuesday.
In response, both Honda and Nissan released similar statements, offering no specifics or timeline regarding a possible agreement.
“As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” the companies stated. “If there are any updates, we will inform our stakeholders at the appropriate time.”
Among the avenues under consideration, Honda is looking into a merger, a capital tie-up, or the establishment of a new holding company that would oversee the integrated operations, as noted by Executive Vice President Shinji Aoyama on Wednesday, according to The Japan Times.
Nissan, once at the forefront of electric vehicle development, has struggled to keep pace with competitors like BYD, which have excelled in technology while offering more affordable models.
Honda, facing its own challenges, has committed to selling only zero-emission vehicles in major markets such as the EU and the US by 2040. Still, the shift from gasoline and diesel to electric vehicles has been slowed by weak demand, low fuel prices, and inadequate charging infrastructure.
Should a merger take place, experts suggest the new entity would be well-positioned to make the necessary investments to compete with industry leaders like Tesla and BYD.
“Both players stand to gain from this merger,” remarked Vivek Vaidya, senior vice president of mobility at Frost & Sullivan, in an interview with Bloomberg on Wednesday. “The combined entity will be a complete automaker.”
There are also indications that Mitsubishi Motors may join the discussions, as the third major Japanese manufacturer already has capital connections with Nissan and is reportedly partaking in early talks.
This development comes in the wake of a surge in electric vehicle production in China, the world’s largest automotive market. Chinese consumers are increasingly opting for local brands, which enjoy a more favorable perception domestically, aided by government incentives to encourage EV and plug-in hybrid adoption.
Emily Johnson for TROIB News
These talks between the two prominent Japanese automakers occur amid fierce competition from Chinese electric vehicle manufacturers and a slower-than-anticipated demand for EVs.
Initial reports of the conversation emerged from Nikkei on Tuesday.
In response, both Honda and Nissan released similar statements, offering no specifics or timeline regarding a possible agreement.
“As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” the companies stated. “If there are any updates, we will inform our stakeholders at the appropriate time.”
Among the avenues under consideration, Honda is looking into a merger, a capital tie-up, or the establishment of a new holding company that would oversee the integrated operations, as noted by Executive Vice President Shinji Aoyama on Wednesday, according to The Japan Times.
Nissan, once at the forefront of electric vehicle development, has struggled to keep pace with competitors like BYD, which have excelled in technology while offering more affordable models.
Honda, facing its own challenges, has committed to selling only zero-emission vehicles in major markets such as the EU and the US by 2040. Still, the shift from gasoline and diesel to electric vehicles has been slowed by weak demand, low fuel prices, and inadequate charging infrastructure.
Should a merger take place, experts suggest the new entity would be well-positioned to make the necessary investments to compete with industry leaders like Tesla and BYD.
“Both players stand to gain from this merger,” remarked Vivek Vaidya, senior vice president of mobility at Frost & Sullivan, in an interview with Bloomberg on Wednesday. “The combined entity will be a complete automaker.”
There are also indications that Mitsubishi Motors may join the discussions, as the third major Japanese manufacturer already has capital connections with Nissan and is reportedly partaking in early talks.
This development comes in the wake of a surge in electric vehicle production in China, the world’s largest automotive market. Chinese consumers are increasingly opting for local brands, which enjoy a more favorable perception domestically, aided by government incentives to encourage EV and plug-in hybrid adoption.
Emily Johnson for TROIB News
