Companies

Nissan, Honda Eye Collaboration for Key EV Components; Envisioned Partnership Would Mainly be for Japan Market

Yomiuri Shimbun file photos
Left: Nissan Motor Co. headquarters is seen in Yokohama.
Right: Honda Motor Co. headquarters is seen in Minato Ward, Tokyo.

The Yomiuri Shimbun

15:45 JST, March 14, 2024

Nissan Motor Co. and Honda Motor Co. have started considering collaborating to reduce production costs for electric vehicles and other types of electrified vehicles. Nissan and Honda will likely focus on whether they can share the same vital parts for such vehicles, it has been learned.

If two of Japan’s major automobile manufacturers decide to collaborate, it could change the framework of the industry, observers said.

Nissan and Honda are said to have been discussing whether they can use the same key components in producing EVs and some hybrid models to reduce costs, according to sources.

The envisioned collaboration is expected to mainly be for the domestic market, in which about 88,500 EVs were sold in 2023, or only about 2% of total sales. Reducing production costs has become an issue for Japanese automakers as there are fewer EVs in the Japanese market compared to China and Western countries.

Over the past several months, executives from the two companies have been discussing whether they could work together, the sources said. However, it is believed that the talks are still at an early stage, suggesting they might encounter some obstacles before details are worked out.

With the auto industry focusing more on electrified vehicles globally, Nissan has been reviewing its entire business. Currently, the manufacturer is working to reduce its production capacity in China by about 30% with an aim to improve the operation ratio of its plants in China, as well as better manage sluggish sales in the country, as more automakers sell EVs there.

Meanwhile, Honda has set a target of making all its new vehicle sales EVs or fuel cell vehicles by 2040. The company would benefit from possible collaboration with Nissan to reduce production costs.

However, Honda has been working by itself in the domestic market. Toyota Motor Corp. has strengthened its ties with Daihatsu Motor Co., Subaru Corp. and other manufacturers, while Nissan has also made similar moves with Mitsubishi Motors Corp., including capital tie-ups.

It is expected that Honda will carefully assess both the positive and negative aspects of collaborating with Nissan.