if the deal goes through it would create the world's third-largest OEM in 2026. //

Beleaguered automaker Nissan is going to throw its lot in with Honda. The two Japanese OEMs want to merge by 2026, creating the world's third-largest car company in the process. In fact, earlier this year the two signed memorandums of understanding to create a strategic partnership focused on software and electrification. Now, the changing business environment calls for deeper integration, they say. //

Altaira Pilgram
This merger is about the rise of Chinese auto companies affecting their domestic markets and for now exports across Asia soon to be global. Over the last few years Chinese domestic auto manufacturers have gutted the sales of companies like GM, VW, and others in China and are now looking to aggressively reshape the international automobile markets. BYD for example is building factories Thailand, Hungary, and Brazil. Nissan, by its own estimates, has said at times it was unclear if it would last through 2027 if it stayed independent thus forcing it to seek out of desperation a strong partner. It also seems the Japanese government had a hand in propping up Nissan with this merger presumably with the goal of protecting its economy and jobs. The hope here is that the merged companies can pool R & D resources to develop not just finished cars but the myriad technologies and finished components that go into them in an timely manner, at scale and at costs that allow them to compete with the Chinese manufacturers. To me it is unclear that any of this is going to work. Saddling Honda with a duplicate but a worse company has to bog them down for years while they figure out what Nissan parts to keep and which parts to shutdown precisely when Honda needs to be nimble. The game of thrones, automobile edition, has begun in earnest.
December 23, 2024 at 4:46 pm