Nissan and Honda merge, is it over?

Photo source: Visual China

Blue Whale News, February 6 (Reporter Li Zhuoling)Less than two months after negotiations, the merger plan of Honda and Nissan, two Japanese car giants, has added to uncertainty.

On February 6, according to Xinhua Agency, citing several Japanese media reports, Nissan Motor Company President Makoto Uchida officially informed Honda Motor Company President Mithiro Mibu on the 6th that Nissan had decided to terminate merger negotiations with Honda. It is reported that on the morning of the same day, Makoto Uchida visited Honda’s headquarters in Tokyo, Japan and held talks with Toshihiro Mito, during which he directly expressed his intention to terminate the merger agreement. However, the two parties have not officially announced the termination of the merger.

Regarding the content of the talks, Blue Whale News sent a confirmation to Nissan. The relevant person in charge said that there is currently no further information to share.“I don’t know about the situation in Japan without updates from the headquarters.& rdquo;

The uncertainty about the merger of Nissan and Honda had been rumored the day before. According to multiple media reports, Nissan has finalized the relevant policy of withdrawing the memorandum of understanding on operational integration with Honda. It is reported that the two parties originally planned to integrate through a holding company, but failed to reach an agreement on conditions such as the integration ratio. During this period, Honda proposed to acquire Nissan as a subsidiary, but strong opposition emerged within Nissan.

In response to this, the above-mentioned Nissan person responded to Blue Whale News on the evening of February 5, saying thatThe two companies (Nissan Motor and Honda) originally planned to decide on the feasibility direction of business integration by the end of January, but discussions in the integration preparatory committee are still ongoing. ldquo; Our goal is to determine the direction and announce it in mid-February.” rdquo;

The merger negotiations between the two parties date back to the end of 2024. On December 23 last year, Honda and Nissan jointly announced that Honda, Nissan and Mitsubishi Motors had signed a memorandum of understanding. Honda and Nissan would officially start merger negotiations, and Mitsubishi Motors would discuss its participation in the merger. Honda and Nissan will merge by jointly establishing a holding company, and both parties will serve as subsidiaries of the holding company.

According to the plan at that time, the integration plan between Honda and Nissan will end negotiations and reach a final agreement in June 2025, and the holding company will be established in August 2026. The shares of Nissan and Honda are expected to be delisted from the end of July to August 2026. Regarding the management and senior team of the holding company, most of the internal and external directors of the holding company formed by both parties will be nominated by Honda, including the CEO.

Public information shows that Honda and Nissan are the second and third largest local automakers in Japan after Toyota. Among them, Honda was founded in 1948, with business spanning automobiles, motorcycles and other fields; Nissan was founded in 1933. When automobile electrification was still in the ascendant, Nissan’s Leaf sales exceeded 400,000 units globally, making it the first one to reach 400,000 mark of pure electric vehicles.

It is reported that if the integration plan is finally realized, the combined annual sales volume of Nissan, Honda and Mitsubishi will reach 8 million vehicles, pointing to the world’s third largest automobile group.

In the history of global automobiles, the merger of automobile giants is not without precedent. At the beginning of 2021, the merger transaction between Peugeot Citroen Group (PSA) and Fiat Chrysler (FCA) was officially completed, and the two parties merged into a new group Stellantis. As a result, after nearly 14 months of integration, the world’s fourth largest automobile group was officially born.

The outside world has also paid great attention to the merger of Nissan and Honda, but there are many opinions in the industry.

Toyota Motor Chairman Akio Toyoda said at the CES 2025 exhibition that he is looking forward to this and hopes to see how to compete with these new models. ldquo; For me, this is very exciting because I look forward to seeing how they work together and launch more competitive products. If this exciting and competitive product is born from the merger, I believe it will have a positive impact on competition in Japan and around the world.& rdquo;

“This is a desperate move.& rdquo; Former Nissan CEO Carlos Ghosn poured cold water during an interview in December last year, believing that the so-called merger between the two companies does not mean the real integration of the two Japanese brands, but more because it wants to promote the deal to promote the Japanese economy. The merger of Nissan and Honda is a desperate move and not a pragmatic deal because it is difficult to find synergies between the two companies. The two companies have almost no complementary aspects. They operate in the same market, have almost the same products, and the brands are very similar.”·“”“ rdquo;

In fact, Nissan and Honda are discussing a merger, which may be based on various factors.On the one hand, due to internal performance pressure, in November last year, when many Japanese automobile brands including Toyota, Honda, Nissan, and Mitsubishi released mid-year financial reports, their net profits all fell year-on-year. Among them, Nissan’s net profit for the first half of the year was only 19.2 billion yen (approximately RMB 918 million), a year-on-year decline of 94%.

According to previous news, in the face of challenges such as declining sales and falling profits, Nissan Motor is taking a series of emergency measures to reverse the situation. To optimize its business, Nissan Motor will cut production capacity by 20% globally; fixed costs will be cut by approximately 300 billion yen and will lay off 9000 jobs worldwide.

On the other hand, as the global wave of automobile electrification accelerates, China automobile companies are accelerating their rise, and their strength has impacted the global automobile market.

On February 5, the list of the top ten global car companies selling brands in 2024 was officially released. For the first time, two China car companies ranked among the top ten. Among them, BYD ranked fifth with annual sales of 4.27 million vehicles, and Geely ranked fifth with annual sales of 3.33 million vehicles. Annual sales entered the top ten in the world for the first time. In terms of specific rankings, Toyota Motor Group continued to rank first with 10.8 million vehicles, Volkswagen Group and Hyundai Kia ranked second and third with 9.03 million vehicles and 7.23 million vehicles, and Stellantis Group followed closely in fourth place. The car companies behind BYD were General Motors with 4.1 million vehicles, Ford Motors with 3.9 million vehicles, Honda Group with 3.81 million vehicles, and Nissan Group with 3.35 million vehicles. According to GlobalData, in 2023, BYD will rank among the world’s top ten automakers for the first time, ranking ninth with sales of more than 3.02 million vehicles.

At present, more China car companies are working hard to squeeze into this list.

Zhu Jiangming, founder of Zero Running Automobile, once asserted in an interview in 2023 that in the era of new energy vehicles, 15 car companies around the world will reach the finals, with China companies accounting for about half. ldquo; The global share of China automobile companies will gradually increase and will account for half of the global automobile market in the future. I think this era will come.” rdquo;

At the end of December last year, Li Bin, founder and chairman of NIO, also said in an interview that in 2035, at least five of the world’s top ten automobile companies will be China automobile companies, and China companies will account for more than 40% of the global market share.

As China’s car companies rise faster and faster, it will be very interesting to see how multinational car companies that were once dominant in the era of fuel vehicles will respond. It will still be time to answer where the drama between the two major Japanese car companies will go.