Honda and Nissan in Merger Talks to Combat Electric Car Competition

Japanese car makers Honda and Nissan are in talks over a potential merger to help them survive the slowing electric car market. They continue to struggle against Chinese manufacturers such as BYD, Geely and SAIC as well as American EV powerhouse, Tesla. Nikkei reported on Tuesday that the merger would likely include Mitsubishi Motors, of which Nissan is a 24 per cent stakeholder.

The Japanese car manufacturing giants are said to be considering operating under a holding company and will sign a memorandum to that effect, but the discussions are in early stages and neither company has confirmed that a deal has taken place. The two companies are expected to confirm the talks next week, as reported by Japanese TV channel TBS. Nissan - which is Japan's second biggest car manufacturer, with Honda third - has been struggling to find ways out of its estimated $5.6billion debt. At the start of December, reports suggested Nissan is on the brink of collapse and had ‘12 to 14 months to survive’ as it couldn’t keep up with cheap Chinese EV imports. Honda and Nissan are reported to be in talks about a potential merger to help them survive in the growing electric car market. In March, Honda and Nissan agreed to a strategic EV partnership, which in August was extended to batteries and technology. However, the latest merger would be a stronger resource-sharing arrangement to benefit both companies against cheaper rivals. While the union would raise questions about British jobs – Nissan employs 7,000 workers in the UK – it would see the firms amalgamate a combined worth of £41bn. Since the merger reports surfaced, Nissan shares have surged 23.7 per cent – the firm’s best day since 1985 – and Mitsubishi's also jumped 20 percent. Honda’s shares have slipped three percent

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