NISSAN AND HONDA PLAN TO MERGE TO FORM THE WORLD’S THIRD-LARGEST CARMAKER

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Fri 20 December 2024:

Honda and Nissan, Japan’s second and third-largest automakers respectively, are reportedly in merger discussions to strengthen their position in the rapidly evolving automotive industry.

This potential merger aims to address challenges such as increased competition from Chinese electric vehicle manufacturers and the global shift towards electrification. By combining resources, the two companies seek to enhance their competitiveness in the electric vehicle market, achieve economies of scale, and reduce costs.

While both automakers have acknowledged exploring collaborative opportunities, no formal decisions have been announced regarding a merger.

Analysts suggest that this move could trigger further consolidation within Japan’s automotive sector, prompting other companies to consider mergers to remain competitive. The success of such a merger would depend on effectively integrating operations and leveraging combined strengths to navigate the industry’s ongoing transformation.

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It’s important to note that, as of now, no official confirmation has been provided by either company regarding the merger. The situation remains fluid, and further developments are anticipated.

The merger aims to challenge global electric vehicle (EV) leaders such as Tesla and Chinese EV-makers like BYD, as well as reduce costs and boost their competitiveness.

The combined sales of Honda and Nissan, as well as Mitsubishi Motors, which is Nissan’s partner, would reach around 8 million vehicles annually, rivaling Toyota and Volkswagen in size.

Honda and Nissan had inked a deal in March to start feasibility studies on EV production and software to cut costs and boost competitiveness, with Mitsubishi Motors joining later.

The three firms reportedly said in a recent statement that they are currently “considering various possibilities for future collaboration,” but no decisions have yet been made.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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