Makoto Uchida (left), president and CEO of Japanese automaker Nissan, shakes hands with Toshihiro Mebe (right), director, president and CEO of Honda Motor Company, after a press conference in Tokyo on August 1, 2024.
Richard A. brooks | AFP | Getty Images
Nissan Motor Shares rose on Wednesday after a media report that the struggling Japanese automaker was looking to merge Honda MotorAnd forming a larger entity that can compete with larger competitors and invest more in the growing market for electric vehicles.
Nissan shares rose in recent trading by 22%, while Honda shares fell by 1.6%.
Honda and Nissan are considering working as a holding company and will soon sign a memorandum of understanding, according to a report in the Nikkei newspaper. They're also looking forward to bringing them on eventually Mitsubishi MotorsNissan is the largest shareholder with a 24% stake in the holding company, according to the report.
The merger, if successful, would be particularly beneficial for Nissan, which has previously announced plans to cut 9,000 jobs and cut global production capacity by a fifth amid fierce competition in its key markets.
Joe McCabe, president and CEO of AutoForecast Solutions, told CNBC on Wednesday that Nissan needed to be “revitalized” after its relationship with Nissan. Renault He went sideways.
“They (Nissan) didn't really have a leadership position in any of the segments in which they competed,” he said.
Nissan said in a statement that media reports that it is “considering business integration” with Honda are not based on an announcement from the company. Nissan said it is examining various possibilities for future cooperation with Honda and Mitsubishi, but no decisions have been made. shares Mitsubishi The latter was up 14%.
According to Nikkei, the joint venture between Nissan, Honda and Mitsubishi will equate to sales of more than 8 million vehicles annually. This would place the company among the world's largest automakers, but it is still lower than Japanese automaker Toyota Motor, at 11.2 million in 2023, as well as German automaker Volkswagen, which last year reported sales of 9.2 million. car.
The merger report comes after the two Japanese automakers entered into a strategic partnership earlier this year on shared vehicle components and software.
Such a tie-up would be the largest auto industry merger since Fiat Chrysler joined France-based PSA Groupe to form Stellantis in January 2021.
The global auto industry faces many challenges including the transition to electric vehicles, a category dominated by the likes of them Tesla And the Chinese company BYD. VolkswagenFor example, it plans to close factories and eliminate thousands of jobs in Germany, while General Motors recently halted Cruise, its self-driving robotaxi company.
For Honda and Nissan, there is also the threat of tariffs proposed by President-elect Donald Trump that could require a widespread reorganization of global supply chains.
-Michael Wayland and Kevin Lim contributed to this report.