Late last year, automakers Nissan and Honda revealed that they were in negotiations over a possible merger, made necessary by the fact that - after a horrible 2024 - Nissan is in survival mode.
And while talks continue, more of Honda’s seemingly non-negotiables are being revealed, including some that seem like such high bars they lead to questions over whether this could go through at all.
For one, recent reports say Honda wants Nissan to essentially triple its profits by August of next year, along the tentative timeline for the merger. This sounds tough on its own; worse if you consider that Nissan’s operating profit plummeted 90% in the first half of its fiscal year. Reports say the profit target would be tantamount to about a $2.6 billion profit increase.
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Oh, but Honda has more plans than just that: It’s also been revealed that Honda allegedly has concerns about a large Nissan stakeholder – Renault, a French automaker that’s part of an alliance with Nissan and holds a stake in it of 35%.
A Bloomberg report says Honda fears Nissan could fall under “undesirable foreign influence” if a third party were to buy up the stake Renault currently holds during negotiations. Therefore, the report says Honda wants Nissan to buy Renault’s stake itself, which would mean shelling out more than $3 and a half billion.
For a company who saw its net income fall 94% in the first half of its fiscal year, all of this feels like a tall order – perhaps an insurmountable one.
Multiple reports have suggested that the Japanese government is pushing the merger behind the scenes, based on the interest expressed in Nissan by Foxconn. The idea is that Japan would do anything to prevent one of its historic brands from becoming a Taiwanese company instead.
But there’s a lot to achieve in order to make it work, and former Nissan Chairman Carlos Ghosn recently stated that he just doesn't see it, adding “the synergies between the two companies are difficult to find.”
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Late last year, automakers Nissan and Honda
revealed that they were in negotiations over a
00:04.639 --> 00:09.600
possible merger made necessary by the fact that
after a horrible start to 2024,
00:09.680 --> 00:12.670
Nissan is in survival mode.
And while talks continue,
00:12.920 --> 00:15.920
more of Honda's seemingly non-negotiables are
being revealed,
00:16.069 --> 00:19.079
including some that seem like such high bars
they.
00:19.200 --> 00:21.940
To questions over whether this could go through
at all.
00:22.149 --> 00:27.590
For one, recent reports say Honda wants Nissan
to essentially triple its profits by August of
00:27.590 --> 00:30.750
next year, along the tentative timeline for the
merger.
00:30.950 --> 00:34.939
This sounds tough on its own, worse if you
consider that Nissan's operating profit
00:34.939 --> 00:38.299
plummeted 90% in the first half of its fiscal
year.
00:38.869 --> 00:43.869
Reports say the profit target would be
tantamount to about a $2.6 billion profit
00:43.869 --> 00:46.709
increase.
Oh, but Honda has more plans than just that.
00:47.150 --> 00:52.319
It's also been revealed that Honda allegedly
has concerns about a large Nissan stakeholder,
00:52.500 --> 00:57.500
Renault, a French automaker that's part of an
alliance with Nissan and holds a stake in it of
00:57.500 --> 00:58.689
35%.
00:58.939 --> 01:04.529
A Bloomberg report says Honda fears Nissan
could fall under undesirable foreign influence
01:04.529 --> 01:09.019
if a third party were to buy up the stake Rena
currently holds during negotiations.
01:09.870 --> 01:14.019
Therefore, the report says Honda wants Nissan
to buy Renault's stake itself,
01:14.309 --> 01:17.940
which would mean shelling out more than $3.5
billion.
01:18.150 --> 01:22.309
For a company who saw its net income fall 94%
in the first half of its fiscal year,
01:22.430 --> 01:26.300
all of this feels like a tall order, perhaps an
insurmountable one.
01:26.510 --> 01:30.430
Multiple reports have suggested that the
Japanese government is pushing the merger
01:30.430 --> 01:34.120
behind the scenes.
Based on the interest expressed in Nissan by
01:34.120 --> 01:39.400
Foxconn, the idea is that Japan would do
anything to prevent one of its historic brands
01:39.400 --> 01:41.819
from becoming a Taiwanese company instead.
01:42.040 --> 01:43.800
But there's a lot to achieve in order to make
it work,
01:43.839 --> 01:48.349
and former Nissan chairman Carlos Ghosn
recently stated that he just doesn't see it,
01:48.519 --> 01:53.169
adding, quote, the synergies between the two
companies are difficult to find.
01:53.680 --> 01:56.069
I'm Anna Wells, and this is manufacturing now.