Alleged conversations between Honda and Nissan represent China’s challenge to Japan
Some mergers are driven by need, while others are motivated by convenience. The proposed merger of Honda and Nissan is essentially defensive, as Chinese competitors are taking the world by storm.
While China’s almost infinite skill in electric vehicles presents a significant challenge for all traditional automakers, it also poses a threat to Japan’s enormous automotive manufacturing supply chain, which has long served as the country’s economic engine.
Honda, Japan’s second-largest automaker, and Nissan, Japan’s third-largest, are in talks to strengthen relations, including the formation of a holding company, two individuals familiar with the situation said Wednesday. According to one of the sources, the manufacturers are in talks about merging.
Honda and Nissan, like other international automakers, lost momentum in China, the world’s largest car market, as BYD and other domestic companies wowed customers with electric and hybrid vehicles loaded with cutting-edge software.
Honda reported a 15% drop in quarterly profits last month, hurt by the slump in China, and has been reducing its workforce there. Nissan, a long-struggling company, plans to cut 9,000 jobs globally and its manufacturing capacity by 20% due to falling sales in China and the United States.
“For Japan, ultimately, it’s automobiles that are important. If the auto industry does not improve, then the entire Japanese manufacturing industry will not improve,” said Takumi Tsunoda, senior economist at the Shinkin Central Bank Research Institute.
“For Japan, ultimately, it’s automobiles that are important. If the auto industry does not improve, then the entire Japanese manufacturing industry will not improve,” said Takumi Tsunoda, senior economist at the Shinkin Central Bank Research Institute.
“For Japan, ultimately, it’s automobiles that are important. If the auto industry does not improve, then the entire Japanese manufacturing industry will not improve,” said Takumi Tsunoda, senior economist at the Shinkin Central Bank Research Institute.
