HONDA and NISSAN Merger.
1) Grand Merger announced by Honda and Nissan
Recently in Tokyo, Japan, Honda and Nissan announced a merger, which it is safe to call the 3rd largest merger in the automobile sales industry. Therefore, both industries are going for major changes and diversification and not relying entirely on fossil fuel. Honda's president said that both companies will combine their operations and will work under the same roof as well as try to make new products. Moreover, this merger will also include Mitsubishi (it is Nissan's major shareholder), so it will be a three-company merger. The deal is expected to be done and completed by June 2025.
2) Game Changer for both the automobile industry
Nissan and Honda both were lagging behind electric vehicles and smart automobiles against their competitors, whereas in Japan, Toyota is the leader of electric vehicle sales and leading manufacturer, which is why this is one of the major reasons for the merger, as the market is shifting from traditional automobiles to smart and electric automobiles. Moreover, there is also a plan to cut costs, downsize, and restructure their approach according to the new market, consumer demand, and consumer expectation. Both presidents agree that they would apply the same principles and the brands of each company. The aim is to bring the company holding and share in the Tokyo exchange in June 2026. This is the first phase of talks, and no value is decided in terms of dollars for the companies. Amazingly, this deal could alone be worth USD 50 billion, and it could easily compete with Toyota and Volkswagen as it would provide much-needed plans and capital to compete. As reported in Nov 2024, Nissan is laying off 9000 employees due to capital and sales struggles.
3) One of the main goals is to compete with China.
There is no doubt that China has recently taken over the automobile industry from Japan, and it is leading the world market right now. Moreover, China has become the major supplier and producer of electric vehicles, which is not surprising as China is one of the major leaders of technology export and is even beating the USA in that department. Moreover, Nisan CEO Makoto Uchida claims that both industries sales are estimated at USD 191 billion. Moreover, this deal is not to save Nissan but to compete with greater emerging markets by 2030; otherwise, our sales would nosedive and would be making loses. Therefore, the merger would be a boost for both companies and a clear plan to compete with China in the electric vehicle field.
