After the rapid adoption of electric vehicles and the upheaval created by EV makers like Tesla and BYD, once-reigning Japanese automakers Honda and Nissan have also embarked on making strides in the electric realm.
The Japanese car makers have officially entered into talks to establish a third top car company in terms of sales to compete efficiently in the rapidly evolving EV and autonomous driving market.
The Need for Innovation
Honda CEO Toshihiro Mibe stressed the crucial need for increased scale to effectively compete in the evolving electric vehicle and intelligent driving sectors.
He emphasized that achieving greater scale is essential for the companies to effectively compete in the development of new technologies within these sectors. The merger aims to leverage the combined resources and expertise of both companies, enabling significant cost savings, accelerated technological development, and an enhanced market share.
Key Aspects
- Holding Company Structure: A holding company will be established as the parent entity, with both Honda and Nissan maintaining their independent brands and stock exchange listings.
- Leadership and Governance: Honda, being the larger company, will nominate the majority of the board members of the merged entity.
- Financial Projections: The combined group is projected to have annual revenue exceeding $191 billion (30 trillion yen) and operating profit surpassing $3 trillion yen.
The merger is expected to result in a company with a market value of roughly $54 billion, with Honda’s contribution constituting the more significant share at $43 billion.
Challenges & Competition
Reports revealed the said discussion to form this merger is likely to conclude in June 2025. The new group has extended an invitation to Mitsubishi, Nissan’s strategic partner, to join the alliance. Mitsubishi is expected to make a decision regarding this offer by the end of January 2025.
Mibe indicated that the integration process is anticipated to be a long-term endeavor, with tangible outcomes not foreseen until 2030 or later.
Reports translated that the proposed merger comes on the heels of Nissan’s recent financial struggles. Mibe acknowledged that some Honda shareholders might interpret the deal as a form of support for Nissan stating that “If Nissan and Honda are unable to stand independently, the business integration discussions will not proceed.”
What do you think about this alliance to form another car giant? Would it be a successful move? Tell us in the comments section.
From the official communication Foundations of the Honda-Nissan Merger :the merger aim to tackle industry challenges, including electrification, advanced mobility technologies, and intensifying competition
Why are so only focused on EV ???
It is making you biazed
@Waqas
https://www.pakwheels.com/blog/the-rise-of-electric-vehicles-in-pakistan-are-we-ready-for-the-shift/
You have been on this “EV Bad!” Binge for a while now. Here is an interview with Andy Palmer that you must read. Andy Palmer was the COO of Nissan and led the development of the Nissan leaf. The car you love to give examples of as “Japanese prowess in the EV space.”
*https://www.businessinsider.com/godfather-of-evs-explains-why-china-is-winning-ev-race-2024-12
*https://www.digi24.ro/stiri/sci-tech/auto/nasul-vehiculelor-electrice-explica-strategia-de-succes-a-chinei-si-greseala-pe-care-o-fac-producatorii-occidentali-3060189
*https://itc.ua/en/news/hybrids-the-road-to-hell-the-father-of-electric-cars-explains-why-china-is-winning-the-electric-car-race/
Highlights from the Interview:
“Hybrids are a road to hell. They are a transition strategy, and the longer you stay on that transition, the less quickly you ramp up into the new world,”.
“If you just delay transitioning to EVs by diluting it with hybrids then you are more uncompetitive for longer, and you allow the Chinese to continue to develop their market and their leadership. I honestly think it’s a fool’s errand,”
“The Chinese cars are bloody good. The Chinese vehicles offer remarkable value for money for what they deliver,”
“Their battery technology’s class-leading, and they’ve concentrated very much on their software,”
The surging growth of China’s EV giants has put Palmer’s former employer Nissan and its Japanese rivals Toyota and Honda under severe pressure.
Palmer said that while Toyota’s decision to focus on hybrids paid off initially, it had left it and other Japanese automakers exposed as key markets such as China transition quickly to EVs.
“Toyota took the Japanese industry down a cul-de-sac (dead-end-road), which it is going to struggle to recover from,” he said.
The former Nissan executive said his old company, meanwhile, had “shot itself in the foot” and squandered a promising lineup of electric vehicles and a 10-year lead in EV tech.
“Nissan finds itself now with a very poor lineup of products and without obvious leadership in EVs, and that’s the direct result of poor management,”
“If the West wants to catch up, I would advocate copying the Chinese,”
Palmer said selling cheaper vehicles with smaller batteries and less range would require governments to incentivize the rollout of charging networks to alleviate range anxiety.
All His words NOT mine.
How will this merger tackle anything? when companies merge, they take on their debts as well. If Honda merges with Nissan it will take on Nissan’s debt. With global sales falling (as I have shared with you so many times), how will they tackle the debt let alone anything else?
All these companies are doing is burying their heads in the sand, prolonging their dependence on old technology and getting even more uncompetitive day by day. They can merge all they want. But to what end? Will it save them?
We here in Pakistan love to blast the local assemblers for always introducing older models; and rightly so!!! why should we pay a lot for so much less.
Yet here we are defending and advocating being left behind with these old companies with their old technology just because we like their familiar names.
The Japanese are NOT headed in the right direction. Either we stay behind with them or get out of our comfort zone and move forward.