Nissan may be saved from bankruptcy! Honda and Nissan have confirmed rumors that they want to join forces. The two companies jointly wrote a press release that discussed the future of Nissan and Honda together. Here’s what’s been revealed so far, along with details about what’s next for Nissan.
Where are Nissan and Honda in merger talks?
At the beginning of this month it was reported that Nissan is looking at the bottom of the barrel of bankruptcy. The carmaker lost 90 percent of its revenue from last year and Renault, which rescued the company from bankruptcy in 1999, has been pulling away from Nissan. Ever since the news of the company’s struggles came to light, there have been talks about the possibility of a business deal between Honda and Nissan. Now we know it’s not just a rumor.
Both companies have confirmed that they are pursuing a merger. Although both Honda and Nissan will continue to operate as their own brands, they will be doing so under a new joint venture parent company. It is possible that Mitsubishi (a subsidiary of Nissan) will join the merger. If that happens, it will be the third largest in the world by volume of car sales. Together, these three brands will be worth up to $50 billion.
“Today marks an important moment as we begin discussions on a business combination that could shape our future,” said Makoto Uchida, CEO of Nissan.
Talks about a merger are still in the early stages, but the companies are pushing to make it happen. “We are still in the early stages of our review and have not decided on a business combination yet,” said Toshihiro Mibe, Honda’s director.
That said, he made it known that the companies aim to have the merger indexed “by the end of January 2025.” Then, business leaders hope to have an agreement on the merger by June 2025. The shareholders of each company must approve the merger and approval may depend heavily on Nissan’s turnaround.
How Consolidation Could Affect the Auto Industry
Although Honda and Nissan compete technically in the car market, there are areas where both companies contribute. Nissan sells trucks and SUVs that are not supplied by Honda. Not to mention, it has more experience in EVs, which are becoming popular. At the same time, Honda is financially stable while Nissan is struggling.
Honda and Nissan were already planning to cooperate in 2025. The two automakers announced plans to collaborate on electric vehicle components and software development. Working under the same parent company can make things much easier. However, it could also lead to mass layoffs in Japan and elsewhere around the world.
As mentioned above, Nissan has had an alliance with Renault. The Renault-Nissan-Mitsubishi Alliance each holds 15% of the other’s voting rights. In 2017, the three automakers sold more vehicles than any other manufacturer at 10.6 million worldwide. In addition, these three are the largest EV manufacturers in the world. If the Nissan-Honda merger goes ahead, it is unclear what will happen to the alliance. However, it could be what saves Nissan from certain death.
Read more
- How Trump’s 100-Day Plan Could Reshape the Auto Industry
- Hacked Digital License Plates: How Cybercriminals Can Switch Tolls and Tickets for You
Source link
