Honda, Nissan Considering Merger as Chinese EV Dominance Looms

Honda and Nissan, two of Japan’s biggest carmakers, are in talks to merge in a bid to counter challenge from Chinese electric vehicle (EV) manufacturers. The merger would form one of the world’s largest automotive groups if completed, alongside Toyota, Volkswagen, General Motors and Ford.

The emergence of Chinese EV makers, like BYD, have shaken up the global car world, forcing consolidation. Honda chief executive officer Toshihiro – Honda Motor Co. needs to act quickly to prevent Japanese automakers from being left behind in the global shift towards electric vehicles, its chief executive officer said on Thursday, while also pushing back against a nationwide call to phase out petroleum-based vehicles by 2035. “The structure of the automobile industry is rapidly changing,” Mibe said.

And it would encompass Mitsubishi, whose largest shareholder is Nissan, allowing all three companies to pool resources to better compete with global rivals such as Tesla. By pooling their expertise and technology, they would have greater capacity to produce competitive EVs and lower costs.

The world’s largest EV producer, China has cornered the EV market through lower production costs and government subsidies. Konrad Putzier reported that the European Union has responded to the threat by imposing tariffs as high as 45% on imports of Chinese EVs. But it has raised concerns about higher EV prices to consumers.

Nissan, which has struggled with sales and job cuts in recent years, views the merger as a chance to regain its competitiveness. Honda and Nissan together boast more than $191 billion in combined annual sales, CEO Makoto Uchida noted. Even still, Mibe rejected claims that the merger was a Nissan bailout plan, arguing it was a strategic move driven by the imperative to survive.

Honda and Nissan have already been partnering on EV technologies since March, when the two companies signed an expanded collaboration deal for battery development and other progress in August. But the proposed merger would probably spell the end of Nissan’s decades-old partnership with Renault as well as encountering political opposition in Japan over the chance of job cuts.

The talks have been dismissed by former Nissan chief Carlos Ghosn as a sign of desperation, but Mibe defended the plan as a vision for the future. By pooling their resources, the companies want to cement their position in an increasingly fast-changing automotive market and fend off intensifying competition from China and elsewhere.