Top Japanese carmakers Nissan Motor and Honda Motor are understood to be exploring a blockbuster merger, as the two rival companies seek to stay competitive on the road to full electrification.
The prospective tie-up could create the world's third-largest auto group by vehicle sales, with 8 million sales annually, according to Citi.
"It's been struggling in the market, it's been struggling at home, it doesn't have the right product line-up. There are so many warning signs, so many red flags around Nissan at the moment that something had to happen," he added."Whether this is the answer is another question.
"At a minimum, we think Nissan needs to clarify where its particularly complex capital relationship with Renault, which involves the French government, will end up and also provide details on the restructuring proposal it announced," Kishimoto said in a research note published Wednesday. "You have to bear in mind that this would have to come with the Japanese government's blessing because there is the potential for workforce cuts but then, how are the Japanese automakers going to compete with the low-cost vehicles from China?" Guthrie said.
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