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Yomiuri Shimbun file photos The Nissan and Honda logos
The Yomiuri Shimbun
17:43 JST, December 18, 2024
Honda Motor Co. and Nissan Motor Co. have entered negotiations toward a business integration, it was learned Wednesday. They plan to operate under a holding company and will consider including Mitsubishi Motors Corp., of which Nissan is the top shareholder.
If realized, the integration will create the world’s third largest automobile group in terms of global sales volume. The rise of newcomers in the United States and China has intensified competition in the development and sales of electric vehicles (EVs) and next-generation automobiles, driving the Japanese automakers to increase their operational efficiency through closer ties.
Nissan released a comment on Wednesday morning, stating, “Nissan, Honda, and MMC [Mitsubishi Motors] are considering various possibilities for future collaboration.” Honda also released a similar comment. They will soon sign a memorandum and proceed with negotiations over the timing to establish a holding company, an investment ratio and leadership appointments.
Global sales levels in 2023 were 3.98 million cars for Honda, 3.37 million for Nissan and 780,000 for Mitsubishi Motors, totaling 8.13 million. This would make the alliance the world’s third largest in terms of sales, after the Toyota Group with 11.23 million and Germany’s Volkswagen Group with 9.23 million.
Honda and Nissan announced in March that they have officially started considering forging a strategic partnership in the development of EVs and announced its details in August, including the standardization of core components and software that controls vehicles’ onboard computers, as well as the participation of Mitsubishi Motors in the framework.
Behind the move to integrate their management is the rapid rise of U.S. and Chinese rivals. Companies like Tesla Inc. and BYD Co. have taken the lead in developing EVs and next-generation “software defined vehicles” that can improve their performance through software updates.
Honda President Toshihiro Mibe told reporters in August, “We won’t be able to catch up with them by working individually.”
The business integration is expected to help the carmakers bring together their technologies and share the huge investment costs for the development of next-generation vehicles. Reducing the procurement costs of storage batteries — the core component of EVs — has been a task, and the use of batteries common to both companies is expected to result in volume efficiency.
Nissan’s financial situation, however, is an anxious factor. In its midterm consolidated financial report for the first half of the fiscal year ending in September, Nissan reported a 90% decrease in net profit from the same period last year due to sluggish global sales and has planned to cut about 9,000 jobs as an emergency measure. Tough negotiations are expected regarding the investment ratio in the holding company.
