Honda and Nissan consider merger for auto group, facing challenges in competing with Chinese rivals.

From Investing.com: 2024-12-24 08:51:18

Honda and Nissan are in talks for a potential merger to create the world’s third-largest auto group. They aim for over 1 trillion yen in synergies and a 54% increase in operating profit by leveraging common platforms and joint procurement. However, challenges lie in building capabilities to compete with Chinese rivals by 2030.

Both automakers face hurdles in their model line-up, especially in EVs. Analysts question whether they have enough time to catch up to Chinese rivals in software-driven features and digital experiences in cars. Turnaround in China, the world’s biggest auto market, poses significant execution risk for both companies.

Honda and Nissan are focused on the United States and Japan, with limited benefits from geographic diversification through the merger. However, the integration could help them navigate potential import tariffs under the new U.S. administration. The deal would make them the world’s third-largest auto group, reshaping the industry in response to the threat from Chinese rivals.

Japanese automakers face a technological challenge and risk becoming smaller companies without new partnerships. The potential merger highlights the need for consolidation in the industry, as auto companies grapple with higher capital expenditure and R&D costs per vehicle.



Read more at Investing.com: Analysis-Honda, Nissan tie-up requires something neither can spare: time By Reuters