Car industry: Nissan does not want to become a subsidiary brand of Honda

Nissan could withdraw from the merger talks with Honda. This was reported by the Japanese business newspaper Nikkei. According to the paper, Nissan will suspend the merger talks with Honda as the partners are still too far apart on the terms of the deal. They have not been able to agree on a valuation of the two companies under the umbrella of a holding company. Nissan also does not want to become a subsidiary brand of Honda.

Japan's three major car manufacturers, Honda, Mitsubishi and Nissan, have not been keeping pace with the market development for years, which is currently being driven mainly by Chinese manufacturers in the electric car sector. This not only applies to the hardware, but the Japanese manufacturers have also been lagging in terms of control and operating systems for some time. To remedy the problem, Honda and Nissan agreed to work closely together in mid-2024. However, the plans of the two Japanese car manufacturers do not yet seem to be working out as a merger.

Closer to VW, Tesla, and BYD

Japan's second and third-largest car manufacturers had been negotiating a merger under the umbrella of a holding company due to their lag in electric cars. With combined sales of more than eight million vehicles, they could form the third-largest car group behind Toyota and Volkswagen. With their resources in the field of e-mobility, they should also be better able to hold their own against Tesla and Chinese electric car manufacturers such as industry giant BYD.

In November, Nissan had to announce the reduction of around 9,000 of its approximately 134,000 jobs worldwide, cut global production capacity by 20 percent and reorganize its management. After a brief high in the share price, the Group again lowered its forecast due to the merger talks.

Before the negotiations, the three companies had decided to work together on electric cars and software to overcome their deficits in these areas more quickly. Synergies and economies of scale should reduce costs and risks. Back in August 2024, Honda, Nissan, and Mitsubishi agreed to use standardized motors and inverters in their future electric cars, with batteries developed jointly according to their specifications to be added later. To this end, Honda and LG Energy Solutions founded the “L-H Battery Company”, which will supply Nissan North America from 2029.

(fpi)