Honda and Nissan have agreed to a merger in a bid to reinforce competition set by Chinese car makers. The two giants’ merger, once complete, will make the world’s third-largest automaker and boost their efficiency as they aim to stand the highest ground in the industry.
The merger talks also likely include Mitsubishi which is in alliance with Nissan. Once it materializes, only Toyota and Volkswagen will be ahead in terms of global sales.
In recent years, Japanese carmakers have felt growing contest from Chinese brands especially with electric cars gaining more prominence. Even further, companies such as BYD have even gone in the West clinching record sales giving even Tesla a run for the money.
Honda and Nissan both now need more resources to consolidate their efforts to turn to EVs from gasoline-powered vehicles.
It’s down to the EV thing!
Another prologue to this incoming deal is their lack of solid viability in the EV market. Unlike other competitors, Honda and Nissan have lagged in leading initiatives in vehicle electrification. Pressure is growing from China, which is rising its stakes in leaps and bounds, so the merger has been agreed upon.
“Today marks a pivotal moment,” Nissan CEO Makoto Uchida stated announcing the milestone partnership. “Together, we can create a unique way for (customers) to enjoy cars that neither company could achieve alone.”
The move is understandable on Nissan’s part too. The brand has suffered hugely since Renault seceded and analysts also estimated that the company could go bankrupt around 2026 with its rising debt.
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What does a Honda-Nissan merger mean for consumers?
Honda is the bigger brand between the two and could have an upper hand on what car models to maintain and which ones to scrap. Nissan could take the merger as a vital lifeline to survive and sustain.
Despite Chinese automakers’ recent threats, both are still globally acclaimed brands and have the expertise and resources to galvanize. So, together, they could muster R&D and inject vital resources to stamp authority in the auto market.
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Time will tell how this merger will transpire in the global market.