Amid merger rumours, Honda and Nissan mull setting up of holding company

Makoto Uchida, president and CEO of Nissan Motor, and Toshihiro Mibe, Honda Motor president and CEO, attend their joint press conference in Tokyo, Japan March 15, 2024. — Reuters picas a first-time user . Exclusively for Malay Mail readers: Use codeHonda and Nissan face competition from Tesla and Chinese EV makersPotential merger could face U.S. scrutiny and require concessions

The talks are aimed at setting up an umbrella holding company that Nissan and Honda would then fall under, said the person, who declined to be identified because the information had not been made public. Honda and Nissan on Tuesday issued identical statements saying no merger had been announced by either company.

Over the past year, an EV price war launched by Tesla and Chinese automaker BYD has only intensified pressure on any companies losing money on the next-generation vehicles. That has put pressure on companies like Honda and Nissan to seek ways to cut costs and speed vehicle development, and mergers are a major step in that direction.

The two had combined global sales of 7.4 million vehicles in 2023, but are grappling with challenges from EV makers, particularly in China, where BYD and others have surged ahead. Global automakers General Motors and Ford have slowed investments in EVs as high borrowing costs and poor charging infrastructure hinder their adoption despite government incentives.

Any merger would face significant U.S. scrutiny and Trump has vowed to take a hard line on imported vehicles - including threatening 25 per cent tariffs on vehicles shipped from Canada and Mexico - and he could seek concessions from Honda and Nissan to approve any deal, auto industry officials said. During his first term, Trump threatened tariffs on Japanese vehicles.

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