Like most legacy automakers, Honda and Nissan are struggling to keep pace with Tesla and Chinese EV leaders like BYD.
BYD continues taking the auto market by storm. After another record sales month in November, its second straight with over 500,000 vehicles sold, BYD is causing legacy automakers, like Honda and Nissan, to make drastic moves.
Under the EV merger, Honda will nominate a majority of the board. The new partnership is still subject to shareholder approval from both companies. Due to Nissan’s recently announced turnaround plan, it’s also contingent on obtaining approval from authorities.
Nissan announced its plans to cut around 9,000 jobs last month while reducing global production capacity by 20% after sales fell by 15% in the US and China in October.
No. All three companies sell the same sort of products, into the same markets. Carlos Ghosn, former big dog at the Renault-Nissan Alliance and wanted criminal in Japan, offers that it is, first, a shotgun wedding pushed by the Japanese Ministry of Trade and Industry, and second, will result in an enormous culture clash between Honda and Nissan people.
As a Honda fan and current owner of a Honda and an Acura, I’m concerned. We will have a new company with an overlap between Honda and Nissan, as well as Acura and Infiniti. Are they trying to recreate GM in Japan? If so, who is Pontiac? Who is Cadillac?
The only thing I can think of is Nissan is further along with EV tech than Honda, though obviously not a leader by any sense. Is this another attempt by Honda to get better at EV and without further reliance on GM? Will it work? (I truly hope so).
Honda’s CEO said it was “difficult” to explain why Nissan would make a good business partner.
Analysts believe that Honda’s ideal partner for a merger would be a more “healthy and financially sound company.”
Some speculate that the merger may be an attempt to prevent a hostile takeover of Nissan by a foreign company.
It was an honest statement. Perhaps too honest, as it summed up the collective head-scratching around the world after the merger talks were revealed.
At first glance, the Honda-Nissan merger looks very much like a Hail Mary. Honda is doing decently well—it has a decent gas-powered lineup, a popular following and a strong line of hybrids that have been tiding it over. But the brand is struggling with EVs after its partnership with General Motors fell apart following the launch of the Honda Prologue.
So from the outside looking in—especially when you consider that Nissan could be on the cusp of a hostile takeover by Foxconn—it very much seems like Honda is swooping in to be Nissan’s white knight despite Mibe saying that the merger is “not a rescue.” But the reasoning is questionable. It’s hard to see how Honda would benefit given how much overlap there is between the two companies, but there might be some unseen incentives in Yokohama that the folks at Honda have their eye on.
Like MITI leaning, hard, on Honda, to make all of Nissan’s debt good, for the benefit of the money interests holding Nissan paper? Of course, that would leave Honda crippled, without the capital it needs for product development. Eight years ago, VW lost Billions of capital, in the Diesel scandal. Now, look at the shape VW is in.
