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Honda and Nissan in Talks for Deeper Partnership, Possible Merger

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Auto Industry,Merger,Partnership

Honda Motor Co., Ltd. and Nissan Motor Co., Ltd. are in talks to deepen their strategic partnership, which may lead to a full merger. This comes as both companies face challenges from Tesla and Chinese rivals. A combined entity would create a $54 billion company, the world's third-largest auto group by vehicle sales.

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A combined Honda and Nissan would create a $54 billion company with annual output of 7.4 million vehicles, making it the world’s third-largest auto group by vehicle sales after Toyota and Volkswagen. “This deal appears to be more about bailing out Nissan, but Honda itself is not resting on its laurels,” said Sanshiro Fukao, executive fellow at Itochu Research Institute. “Honda’s cash flow is set to deteriorate next year and its EVs haven’t been going so well.”

The talks between Honda and Nissan, first reported by the Nikkei newspaper, would allow the companies to cooperate more on technology and help them create a more formidable domestic rival to Toyota. French automaker Renault, a major Nissan shareholder, said it had no information and declined to comment.

Bloomberg News reported earlier on Wednesday that Foxconn had approached Nissan to take a controlling stake.

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