Nissan dropped a bombshell in late 2024, revealing just how perilous its financial position was and how close it is to the brink of collapse.
Enter Honda, which signed a memorandum of understanding with Nissan and Mitsubishi (which is also part of the struggling Renault-Nissan Alliance) in late December. The three Japanese brands would immediately become one of the biggest automotive conglomerates in the world, worth more than US$50 billion.
But is it a good idea? Can these three struggling brands unite and become a new force in the automotive world?
The initial global response was lukewarm, with critics claiming the three brands are all too similar to ultimately help each other significantly for the better. However, as it appears there is no alternative for Nissan, the trio will need to make this marriage of convenience work in their shared best interests.
Honda’s executive vice president, Noriya Kaihara, recently met with American media at the Consumer Electronics Show in Las Vegas and outlined some of the potential benefits of the merger. The biggest advantage for Honda would be access to Nissan’s knowledge and production of large SUVs, namely the Pathfinder and Patrol (as well as the Armada in the USA). Specifically, Honda wants to expand its hybrid range above its current ZR-V, CR-V models and into larger vehicles that are in-demand in the US market.
“We are still discussing with Nissan how we will proceed,” Kaihara was quoted as saying. “In the short term, especially in the U.S. market, Nissan has a large class vehicles that we don’t have. So, if maybe we can exchange some of the vehicles, that would also be a benefit for us in the short term. Maybe in the future, we can co-develop those vehicles. But in the short term, if we need we can get some of the Nissan vehicles for Honda as well”
On the other side of the deal, Nissan could benefit from Honda’s American manufacturing footprint if incoming President Donald Trump follows through on his threats to impose tariffs on imported vehicles. Nissan only has three production facilities in the USA while Honda has 12 plants that can produce more than three million vehicles annually.
Then there is the speculation that the Japanese government is pushing the deal in the face of the growing threat from the expanding Chinese car industry. Joining forces would help the three Japanese brands share development costs for the next-generation of electric vehicles and connected car platforms, specifically the expensive software needed.
The Chinese market is now the largest in the world but after decades of dominance from external brands the domestic Chinese automotive industry now has the majority of sales. And the Chinese brands are extending their reach globally, often at the expense of Japanese brands, and Nissan has seemingly been impacted as badly as any.
Nissan was once a leader in the electric vehicle market with the Leaf but has fallen behind in recent years. Honda and Mitsubishi are also playing catch up in the EV market but do have a background in hybrids, in particular plug-in hybrids in Mitsubishi’s case, that would be useful in the short and medium term.
Officially Mitsubishi has given itself until the end of January to make a decision on joining forces with Honda and Nissan, while the latter pair have plans to work on the potential merger through the early months of this year, ahead of making it official by 2026.
Whether it comes to that point is the first hurdle for the three brands to overcome, only once that is done can the real work of trying to turn around the sales decline and combat the rising challengers from China begin. Only time will tell if any of these aspirations can be achieved…
Diskusi tentang posting ini