Japan’s Nikkei has reported that two of the world’s largest automakers may be in merger talks.
Honda and Nissan represent the second and third largest Japanese automobile companies – behind only Toyota in global sales volume.
Still, Nissan has notably lost its footing in the past year. Last month, the automaker reported a net earnings decline of more than 90% for the first half. In turn, Nissan cut its profit forecasts significantly and axed thousands of jobs.
Meanwhile, despite posting a disappointing second quarter, Honda increased its guidance in a sign of strength for the full fiscal year.
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So could a Honda merger take some of the pressure off of fledgling Nissan? Perhaps, though there is still very little detail available. Reuters reported that Honda and Nissan each “issued identical statements” saying no merger had been announced, though they did suggest they’d inform stakeholders of any updates relating to previously announced collaboration goals.
In March of this year, the two firms revealed that they’d be jointly developing electric vehicles and other modern technologies. At the time, Honda President Toshihiro Mibe said the companies share common values and could create "synergies" to help them compete with rivals, all while maintaining their own products.
Edmunds analyst Jessica Caldwell suggested to Reuters that partnerships and mergers like the aforementioned might be the next stage of an automotive market stressed by global competition and heavy pressures for investment in new technologies.
“The thought that some of these smaller players can survive and thrive is getting more challenging …" adding that consolidation might be necessary “not only to survive, but also just to afford the future."
Reuters says any tie-up would be the biggest in the industry since the 2021 merger between Fiat Chrysler and PSA to form Stellantis – a deal that rang in at $52 billion.
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WEBVTT
X-TIMESTAMP-MAP=LOCAL:00:00:00.000,MPEGTS:0
00:00.239 --> 00:05.559
Japan's Nikai has reported that two of the
world's largest automakers may be in merger
00:05.559 --> 00:08.899
talks.
Honda and Nissan represent the 2nd and 3rd
00:08.899 --> 00:14.409
largest Japanese automobile companies, behind
only Toyota in global sales volume.
00:14.720 --> 00:18.350
Still, Nissan has notably lost its footing in
the past year.
00:18.559 --> 00:23.930
Last month, the automaker reported a net
earnings decline of more than 90% for the first
00:23.930 --> 00:27.440
half.
In turn, Nissan cut its profit forecasts
00:27.440 --> 00:28.870
significantly and.
00:29.305 --> 00:33.224
Thousands of jobs.
Meanwhile, despite posting a disappointing
00:33.224 --> 00:38.534
second quarter, Honda increased its guidance in
a sign of strength for the full fiscal year.
00:38.865 --> 00:43.694
So could a Honda merger take some of the
pressure off of a fledgling Nissan?
00:43.865 --> 00:46.775
Perhaps, though there is still very little
detail available.
00:46.985 --> 00:51.944
Reuters reported that Honda and Nissan each
issued identical statements saying no merger
00:51.944 --> 00:56.654
had been announced, though they did suggest
they'd informed stakeholders of any updates
00:56.654 --> 00:57.904
relating to previously.
00:58.369 --> 01:02.849
collaboration goals in March of this year, the
two firms revealed that they'd be jointly
01:02.849 --> 01:06.400
developing electric vehicles and other modern
technologies.
01:06.610 --> 01:12.169
At the time, Honda president Toshihiro Mibe
said the companies share common values and
01:12.169 --> 01:15.760
could create synergies to help them compete
with rivals,
01:15.769 --> 01:20.769
all while maintaining their own products.
Edmund's analyst Jessica Caldwell suggested to
01:20.769 --> 01:26.169
Reuters that partnerships and mergers like the
aforementioned might be the next stage of an
01:26.169 --> 01:29.834
automotive market.
Stressed by global competition and heavy
01:29.834 --> 01:34.474
pressures for investment in new technologies,
the thought that some of these smaller players
01:34.474 --> 01:38.955
can survive and thrive is getting more
challenging, she added that consolidation might
01:38.955 --> 01:43.305
be necessary not only to survive but also just
to afford the future.
01:43.514 --> 01:48.915
Reuters says any tie up would be the biggest in
the industry since the 2021 merger between Fiat
01:48.915 --> 01:55.904
Chrysler, and PSA to form Stalantti, a deal
that rang in at $52 billion.
01:56.410 --> 01:58.910
I'm Anna Wells, and this is manufacturing now.
