Honda & Nissan merger talks

[Shaun @ Tru6]

The benefit to Nissan is easy to see but I think this could hurt Honda more than help if not done correctly and M&A on this scale is almost never done correctly.

Honda and Nissan might combine to form world’s No. 3 auto group

By Kazuaki Nagata and Yukana Inoue
Dec 18, 2024

Honda and Nissan may merge to form the world’s No. 3 auto group, achieving the scale needed to go up against foreign competition and make massive investments into advanced electric vehicle technologies.

“I think this move reflects the current industry trend where automakers need to scale up to prepare for competition that involves autonomous driving and EVs," said Atsushi Osanai, a professor at Waseda Business School.

According to press reports Wednesday morning, the two Japanese carmakers are in discussions to consolidate under a holding company. The reports also said that Mitsubishi Motors, which has been working closely with Nissan since 2016, might join the grouping.

Nissan, Honda and Mitsubishi confirmed the reports in nearly identically worded statements released later in the day. The three said they are considering a number of options including the plan mentioned in the press reports.

“Nothing has been decided at this time,” the statements noted.

Honda CEO Toshihiro Mibe told reporters on Wednesday morning that “there is a possibility” of such a merger, TBS reported.

Honda and Nissan have been working together for months on a deal of some sort. They have been in talks since March on combining resources to develop technology related to emissions, self-driving vehicles and advanced automotive software.

In August, they announced that they will be working together on the development of vehicle operating systems and other EV-related technologies to save on costs and better compete in markets.

It is not clear from the company statements whether talks have advanced further or whether the press reports were simply a rehashing of what has already been disclosed in terms of discussions and goals.

Trading in Nissan shares was halted on Wednesday morning. They rose after trading resumed and ended the day up 23.7%. Shares of Honda were down 3% by the end of trading on Wednesday afternoon, while Mitsubishi Motors closed up 19.7%.

"Historically, Honda has been a company that has gone its own way, so I was quite surprised to see the reports that it is seeking a merger with Nissan,” said Osanai.

In the first half of this fiscal year, Nissan’s net profit fell about 90% mainly due to sluggish sales in North America and China. Following the weak earnings report, the company announced it would cut 9,000 jobs globally.

In future automotive technologies, critical mass is important, with the survival of even the largest companies hinging on the ability to develop in-house systems and batteries. Scale will be essential to go up against the likes of Texas-based Tesla and Shenzhen’s BYD in the making and selling of EVs.

“The current scales of Nissan and Honda are not really enough,” said Osanai. “A merger would therefore place them in a more advantageous position.”

Last year, Honda’s global sales were 3.98 million units and Nissan’s were 3.37 million, meaning that if merged, they could become the third-largest auto group in the world, after Toyota and the Volkswagen Group.

As the demand for EVs has been sluggish and hybrid vehicles have been selling well, Honda’s hybrid technology will be key, Osanai added. It can go toe-to-toe with Toyota’s technology.

The lack of popular hybrid models has put Nissan in a difficult position.

If the combined entity materializes, it will face challenges related to the integration of two large and very different corporations. Their cultures are very different, and this could create problems as they start working together closely.

“If they can effectively manage what they need to share and work together and what needs to be different, I think it is possible for them to succeed,” Osanai said.

[Tobra]

Timing is interesting, in that they waited until after the US election

[javadog]

I think that any manufacturer that pursues technologies like EV and self-driving on a large scale is headed for bad times. EV is a niche market and self-driving is a bad idea.

Collaborating on platforms shouldn't make much difference in cost savings, either. There are still too many parts that are different between brands and models, unless you do badge engineering like Chrysler used to do.

Makes little sense to me. What you want is most profitable, not biggest.

[LWJ]

Might be a great combo. I have always looked down on Nissan for some reason. Seemed like the sad stepsister to mighty Toyota.

[berettafan]

I wonder what would be the gain for Honda? I've not set foot in a Nissan dealer since i compared the Sentra SE R to the Civic EX back in the late 90s. Is there something they do better than Honda? I really can't imagine what that would be.

[Sooner or later]

They are trying to fend off the Chinese upstarts.

Honda and Nissan combined (Mitsu?) give them the volume to compete in the fast changing auto manufacturing environment.

[herr_oberst]

There must be some technology that Nissan (and Mitsubishi) has that Honda is interested in, and now is a good time to go after it.

[stevej37]

^^^ Variable Compression is Infinity's (Nissan)

It's most likely used in some Nissan models also.

https://forums.pelicanparts.com/off-topic-discussions/944574-variable-compression-engines.html


.

[mgatepi]

Economy of scale

[Ralph3.]

Perhaps an actual truck, Nissan Frontier?

[mattdavis11]

Originally Posted by berettafan

Is there something they do better than Honda? I really can't imagine what that would be.

Maybe Air Conditioning? I do know that Honda is having some pretty serious issues with R-1234yf systems on the Civic and Element. (Civic for sure, the other may have been the Accord) I know other manufacturers are as well though, not sure about Nissan. It was a bad idea to switch to R-1234yf, period. I talk to friends, who are Honda techs, that are seeing condensers and evaporators being eaten up by the stuff, in cars that aren't 2 years old yet.

[cabmandone]

I read about that yesterday and for the life of me couldn't figure out what the upside was for Honda. There was talk of it benefitting the EV program or something along those line.

[stevej37]

Honda is already linked to GM for building their new Prologue EV

[pksystems]

Haven't both of them dropped significantly in reliability in the last couple years?

[mattdavis11]

Originally Posted by pksystems

Haven't both of them dropped significantly in reliability in the last couple years?

Yes. This is coming from the garage, master techs.

[sc_rufctr]

More of the same?

Meanwhile...

https://en.wikipedia.org/wiki/Stellantis

Stellantis N.V. is a multinational automotive manufacturing company formed from the merger in 2021 of the Italian–American conglomerate Fiat Chrysler Automobiles (FCA) and the French PSA Group. The company headquarters are located in Hoofddorp, Netherlands.

As of 2023, Stellantis was the world's fourth-largest automaker by sales, behind Toyota, Volkswagen Group, and Hyundai Motor Group. In 2023, the company was ranked 61st in the Forbes Global 2000. The company's stock is listed on the Borsa Italiana, Euronext Paris and the New York Stock Exchange.[15]

Stellantis designs, manufactures, and sells automobiles bearing its 14 brands: Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram Trucks, and Vauxhall. At the time of the merger, Stellantis had approximately 300,000 employees, a sales presence in more than 130 countries, and manufacturing facilities in 30 countries.

[slow&rusty]

Hey Honda guys...."Save the GTR" !!!

[onewhippedpuppy]

This is strange, what’s in it for Honda? The only way you benefit from economies of scale is to effectively consolidate products and platforms, pretty soon you’re selling rebadged Hondas as Nissans and vice versa. The article says that size and volume are needed to counter the Chinese and Tesla, which is funny because Tesla is small in volume and size compared to many other automakers. Probably the best question, has this ever actually worked out? The Mercedes and Chrysler merger was a disaster, Stellantis is circling the drain and already talking about divesting brands, and GM has been a perennial bottom feeder that had to be bailed out by the USG. As a fan of Honda products I hope they walk this back because I can’t see it doing good things for their brand.

[Bob Kontak]

Originally Posted by slow&rusty

Hey Honda guys...."Save the GTR" !!!

Not a chance they will let that slip away. Marketing gold.

Datsun merged with Prince Motors in 66 as Prince was failing. Prince had bought the rights (well before the merger) to a Mercedes Benz engine design that they used to develop the Prince Skyline GT. Frumpy ass but race-able car.

Datsun put the engine design into a Japan only Z (Fairlady) car and they could not sell them but it was the roots of the GTR.

Here is a HobieMarty video that he posted earlier this year. If you are remotely a Datsun Z nut it's worth the watch. You can also go ten minutes in and find the GTR engine info.

Do not skip the last two minutes of the video for the sound of the engine.

[javadog]

Thanks, I never knew about the 432.

Would love to have one…