By Paul Homewood
h/t Ian Magness
Nissan and Honda are in merger talks, as the forced transition to EVs threatens to bankrupt both of them.
According to the Telegraph:
Honda and Nissan have opened talks to merge as the two Japanese carmakers confront a “crisis” caused by the shift to electric vehicles (EVs).
The companies on Monday confirmed they were in talks to combine at a joint press conference in Tokyo, following earlier reports that the pair were considering a combination.
Mitsubishi Motors, which has a partnership with Nissan, is also considering joining the deal.
The two companies said the deal was necessary to cope with “dramatic changes in the environment surrounding both companies and the automotive industry”.
Mr Mibe said that the companies needed to scale up to compete in the electric vehicle (EV) and self-driving car markets amid fierce competition from a new generation of Chinese carmakers and Tesla.
https://www.telegraph.co.uk/business/2024/12/23/net-zero-crisis-42bn-merger-talks-honda-nissan/
These sort of consolidations rarely work. This one will inevitably lead to slimming down to save money, but retrenchment usually becomes a downward spiral. Lower production, lower market share, leading to yet more cuts.
I have seen this all before in the steel industry here.
There is a very simple message here. With all the benefits of low labour costs, cheap energy and monopoly of battery supply, China will always be able to undercut both European and Japanese carmakers. The banning of petrol/diesel cars takes away the one big advantage the latter had – superior engineering technology.
Meanwhile the likes of Nissan and Honda face the double whammy of punitive fines for selling the wrong sort of car.
