by Read the full story on The Auto Wire
As 2024 draws to a close, a thunderbolt has hit the auto industry, pushing Nissan into the arms of Honda, with the two Japanese automakers reportedly discussing a merger. We can guarantee that at the start of the year virtually no one expected this, yet here we are as the entire industry landscape begins to change dramatically.
Foreign car manufacturers are not doing well in the Chinese market.
We’ve been hearing rumors for a few years now that Honda would be a prime target for a hostile takeover. And for a while, the company’s alliance with General Motors looked like it could grow into something more. With Nissan in financial trouble, it appears the two have decided they are better off together.
The two automakers announced a strategic partnership earlier this year, which didn’t actually attract much attention. Frankly, car companies enter into these types of deals all the time, like when Toyota and Tesla met, and often they don’t last long or yield much. But this time it looks like the payoff could be huge.
News that the two companies were entering merger talks was announced by CNBC in a shocking report based on a Nikkei newspaper report in Japan. The possible plan could reportedly involve a holding company to manage the operations, which would also include Mitsubishi in the merger.
If this deal goes through, the conglomerate would be one of the largest automakers in the world, with global sales of roughly 8 million units per year (Toyota sold just over 11 million in 2023). However, bigger doesn’t always mean better, just ask Stellantis.
The fact that CNBC contacted Nissan and Honda about the merger news and neither automaker outright denied it speaks volumes. There’s probably something going on between the two, even if the details of a possible merger don’t quite add up.
As CNBC notes, there are those in the auto industry who believe companies should merge or that large companies should rapidly gobble up smaller companies to serve as a bulwark against the onslaught of Chinese automakers.
On the other hand, we support diversity of choice in open markets, not an oligopoly where consumers have few choices, essentially forcing them into decisions made by companies that behave more like a cartel than like competitors. The possibility of the auto industry moving in that direction does not concern us at all.
Image via Honda, Nissan
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