Makoto Uchida (L), president and CEO of Japanese auto maker Nissan, shakes fingers with Toshihiro Mibe (R), director, president and consultant govt officer of auto maker Honda, following a press convention in Tokyo on August 1, 2024.
Richard A. Brooks | Afp | Getty Photos
Nissan Motor shares surged Wednesday following a media report that the struggling Japanese automaker is seeking to merge with Honda Motor, forming an even bigger entity that may compete with bigger rivals and make investments extra within the rising marketplace for electrical automobiles.
Nissan shares had been final buying and selling up 22%, whereas Honda shares slipped 1.6%.
Honda and Nissan are contemplating working below a holding firm, and shortly will signal a memorandum of understanding, in accordance with a report within the Nikkei newspaper. In addition they look to ultimately deliver Mitsubishi Motors, wherein Nissan is the highest shareholder with a 24% stake, below the holding firm, in accordance with the report.
The merger, if profitable, shall be particularly useful to Nissan, which had beforehand introduced plans to slash 9,000 jobs and reduce international manufacturing capability by a fifth amid fierce competitors in its main markets.
Joe McCabe, the president and CEO of AutoForecast Options, instructed CNBC Wednesday that Nissan wants a “revitalization” after its relationship with Renault went sideways.
“They [Nissan] actually did not have a management place in any one of many segments they competed in,” he mentioned.
In an announcement, Nissan mentioned media experiences that it’s “contemplating a enterprise integration” with Honda will not be based mostly on an announcement from the corporate. Nissan mentioned it’s contemplating varied potentialities for future collaboration with Honda and Mitsubishi, however no selections have been made. Shares of Mitsubishi had been final up 14%.
The mixed Nissan-Honda-Mitsubishi enterprise would equate to greater than 8 million car gross sales yearly, in accordance with Nikkei. That may place the corporate among the many world’s largest automakers, however nonetheless beneath fellow Japanese automaker Toyota Motor, at 11.2 million in 2023, in addition to German automaker Volkswagen, which final yr reported gross sales of 9.2 million automobiles.
The merger report follows the 2 Japanese automakers getting into right into a strategic partnership earlier this yr on shared automotive elements and software program.
Such a tie-up could be the biggest automotive business merger since Fiat Chrysler joined with France-based PSA Groupe to type Stellantis in January 2021.
The worldwide auto business faces a number of challenges together with the transition to EVs, a class dominated by the likes of Tesla and China’s BYD. Volkswagen, as an illustration, plans to shut factories and reduce hundreds of jobs in Germany, whereas Normal Motors not too long ago pulled the plug on Cruise, its self-driving robotaxi firm.
For Honda and Nissan, there’s additionally the specter of tariffs proposed by President-elect Donald Trump which will require a large reorganization of world provide chains.
– Michael Wayland and Kevin Lim contributed to this report.
