Makoto Uchida (left), president and CEO of Japanese automaker Nissan, shakes hands with Toshihiro Mebe (right), director, president and CEO of Honda Motor Company, after a press conference in Tokyo on August 1, 2024.
Richard A. brooks | AFP | Getty Images
Nissan Motor Stocks saw a record high on Wednesday after… Media report With which the struggling Japanese automaker is looking to merge Honda MotorsAnd forming a larger entity that can compete with larger competitors and invest more in the growing market for electric vehicles.
Nissan shares rose 23.7%, marking the company's best day since at least 1985, according to data from Factset. Factset has no records of the company's stock price after 1985. Meanwhile, Honda shares fell 3%.
Honda and Nissan are considering operating under the umbrella of a holding company, and will soon sign a memorandum of understanding, according to a report in the Independent newspaper. Nikkei newspaper. They plan to bring in eventually Mitsubishi MotorsNissan is the largest shareholder with a 24% stake in the holding company, according to the report.
Speaking to CNBC, Vivek Vaidya, global client leader for mobility at research firm Frost & Sullivan, said the merger was due to Nissan's poor financial performance.
Last November, Nissan published Gloomy results for the second quarter ended September, trimmed full-year revenue and operating outlook. TThe carmaker also announced plans to cut 9,000 jobs and reduce global production capacity by a fifth amid fierce competition in its key markets.
Joe McCabe, president and CEO of AutoForecast Solutions, told CNBC on Wednesday that Nissan needed to be “revitalized” after its relationship with Nissan. Renault He went sideways.
“They (Nissan) didn't really have a leadership position in any of the segments in which they competed,” he said.
Nissan said in a statement that media reports that it is “considering business integration” with Honda are not based on an announcement from the company. Nissan said it is examining various possibilities for future cooperation with Honda and Mitsubishi Motors, but no decisions have been made. shares Mitsubishi Engines closed up 19.7%.
Frost and Sullivan Vidya He said the merger if achieved It will allow all three automakers to “access technology, de-risk innovation and create economies of scale.”
He noted that the combined entity will have experience not only in traditional gasoline-powered internal combustion engine vehicles, but also in hybrids, battery electric vehicles and hydrogen.
Given that automakers are currently investing in both ICE vehicles and battery electric vehicles, a merger between Honda, Japan's second-largest automaker, and Nissan, third-placed, will mitigate innovation risks, Vaidya added.
According to Nikkei, the joint venture between Nissan, Honda and Mitsubishi will equate to sales of more than 8 million vehicles annually. This would place the company among the largest automakers in the world, but it is still less than its Japanese counterpart toyota motorin 11.2 million In 2023, so will the German automaker Volkswagenwhich last year announced sales 9.2 million Vehicles.
The merger report comes after the two Japanese automakers entered into a strategic partnership earlier this year on shared vehicle components and software.
Such a tie-up would be the largest auto industry merger since Fiat Chrysler joined France-based PSA Groupe to form excellent In January 2021.
The global auto industry faces many challenges including the transition to electric vehicles, a category dominated by the likes of them Tesla And the Chinese company BYD. VolkswagenFor example, planning to close factories and Thousands of jobs cut In Germany, while General Motors recently I pulled the plug On Cruise, its self-driving taxi company.
For Honda and Nissan, there is also the threat of tariffs proposed by President-elect Donald Trump that could require a widespread reorganization of global supply chains.
-Michael Wayland and Kevin Lim contributed to this report.
