Honda, Nissan, and Mitsubishi are considering a merger.
Nissan, Honda, and Mitsubishi consider merger: Is a new automotive giant emerging in Japan?
(Image: Nissan Honda Mitsubishi – EV-Magazine)
The intense competition in China and the United States has significantly impacted automaker Nissan in recent times. Now, there is an opportunity on the table to operate under a single holding alongside Honda and Mitsubishi Motors. This move could lead to the creation of the world’s third-largest automaker, with annual sales of an impressive eight million vehicles. This new group would come close to Volkswagen, which sold 9.2 million vehicles last year.
Merger talks between Honda, Nissan, and Mitsubishi
According to the Japanese business newspaper Nikkei, Nissan and Honda have decided to explore the possibilities of a merger, driven by the increasing global competition in the electric vehicle market. The plans include the establishment of a joint holding company that would also incorporate Mitsubishi Motors. Notably, Nissan already holds a 24% stake in Mitsubishi, making collaboration at this level a logical step. A memorandum of understanding is reportedly expected to be signed soon.
Market reactions to the news
The news of a potential merger caused significant movement in the stock markets. Nissan’s share price surged by 24%, while Mitsubishi saw a 17% increase. However, Honda’s shares dropped by 3.4% after an earlier brief rise. The Tokyo Stock Exchange initially considered temporarily halting trading in Nissan shares to verify the accuracy of the reports but ultimately decided against the move.
Challenges at Nissan: 90% profit decline
(Image: honda-nissan-mitsubishi– Autonotizen)
The merger talks come at a time when Nissan is under significant pressure. In the first half of the current fiscal year, which began in April, the company reported a 90% drop in profits compared to the same period last year. Rising competition from Chinese manufacturers in its home market and an outdated model lineup in the United States have taken their toll on Nissan. Particularly, the lack of hybrid models—currently highly popular in the U.S.—has led to declining sales.
To cut costs, Nissan CEO Makoto Uchida announced a comprehensive cost-saving plan in November. This includes cutting 9,000 jobs and reducing global production capacity by 20%. Additionally, activist investor Effissimo Capital Management from Singapore recently gained attention by acquiring a 2.5% stake in the company.
