Makoto Uchida (L), president and CEO of Japanese auto maker Nissan, jounces hands with Toshihiro Mibe (R), director, president and representative executive officer of auto maker Honda, tail a press conference in Tokyo on August 1, 2024.
Richard A. Brooks | Afp | Getty Images
Nissan Motor shares surged Wednesday tag along a media report that the struggling Japanese automaker is looking to merge with Honda Motor, forming a bigger article that can compete with larger rivals and invest more in the growing market for electric vehicles.
Nissan deals were last trading up 23.7%, while Honda shares slipped 3%.
Honda and Nissan are considering operating guardianship a holding company, and soon will sign a memorandum of understanding, according to a report in the Nikkei newspaper. They also look to long run bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company, go together to the report.
The merger, if successful, will be especially beneficial to Nissan, which had previously announced plans to slash 9,000 undertakings and cut global production capacity by a fifth amid fierce competition in its major markets.
Joe McCabe, the president and CEO of AutoForecast Mixings, told CNBC Wednesday that Nissan needs a “revitalization” after its relationship with Renault went indirectly.
“They [Nissan] really didn’t have a leadership position in any one of the segments they competed in,” he said.
In a statement, Nissan predicted media reports that it is “considering a business integration” with Honda are not based on an announcement from the company. Nissan required it is considering various possibilities for future collaboration with Honda and Mitsubishi Motors, but no decisions have been traverse. Shares of Mitsubishi Motors were last up 19%.
The combined Nissan-Honda-Mitsubishi enterprise would equate to more than 8 million means sales annually, according to Nikkei. That would place the company among the world’s largest automakers, but soothe below fellow Japanese automaker Toyota Motor, at 11.2 million in 2023, as well as German automaker Volkswagen, which carry on year reported sales of 9.2 million vehicles.
The merger report follows the two Japanese automakers entering into a key partnership earlier this year on shared automotive components and software.
Such a tie-up would be the largest automotive toil merger since Fiat Chrysler joined with France-based PSA Groupe to form Stellantis in January 2021.
The global auto activity faces several challenges including the transition to EVs, a category dominated by the likes of Tesla and China’s BYD. Volkswagen, for instance, formulae to close factories and cut thousands of jobs in Germany, while General Motors recently pulled the plug on Cruise, its self-driving robotaxi proprietorship.
For Honda and Nissan, there is also the threat of tariffs proposed by President-elect Donald Trump that may require a big reorganization of global supply chains.
– Michael Wayland and Kevin Lim contributed to this report.