Nissan and Honda in Talks for Closer Collaboration, Merger Not Confirmed

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Automotive Industry,Mergers,Nissan

Japanese automakers Nissan and Honda have confirmed discussions for closer collaboration but denied reports of a merger. Reports suggested a potential merger to form the world's third-largest automaker, leading to a surge in Nissan's share price and a decline in Honda's. The companies stated they are 'considering various possibilities' but no decisions have been made. Mitsubishi Motors, a Nissan alliance member, is also involved in the talks.

FILE - Nissan Chief Executive Makoto Uchida, left, and Honda President Toshihiro Mibe attend a joint news conference in Tokyo, Friday, March 15, 2024.

Trading in Nissan's shares was suspended but then resumed after the companies jointly issued a statement saying they were "considering various possibilities for future collaboration, but no decisions have been made."The ascent of Chinese automakers is rattling the industry at a time when manufacturers are struggling to shift from fossil fuel-driven vehicles to electrics. Relatively inexpensive EVs from China's BYD, Great Wall and Nio are eating into the market shares of U.S.

A merger could result in a behemoth worth about $55 billion based on the market capitalization of all three automakers. Fitch Ratings recently downgraded Nissan's credit outlook to "negative," citing worsening profitability, partly due to price cuts in the North American market. But it noted that it has a strong financial structure and solid cash reserves that amounted to 1.44 trillion yen .

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