Honda and Nissan’s merger plans aim to counter China’s growing influence in the global electric vehicle (EV) market. This strategic move, described as a multibillion-dollar integration, seeks to make the combined entity one of the world’s leading car producers, rivaling Toyota, Volkswagen, General Motors, and Ford.
Honda’s chief executive, Toshihiro Mibe, emphasized the urgency of the merger, stating that a firm plan must emerge by 2020 to remain competitive. Nissan’s chief executive, Makoto Uchida, echoed this sentiment, highlighting their annual sales exceeding $191 billion.
The firms aim to claw back market share lost to Chinese EV manufacturers, including BYD, which dominates global EV production. Both Honda and Nissan face mounting challenges due to China’s cost-efficient manufacturing and competitive pricing, which attract international buyers.
EU officials recently imposed steep tariffs on Chinese EV imports due to unfair state subsidies that disadvantage international carmakers. The tariffs, which will rise from 10% to 45%, aim to protect European manufacturers but may drive up EV prices for consumers.
This merger also includes Mitsubishi, with Nissan holding a majority stake, enabling resource sharing to better challenge competitors like Tesla. Earlier agreements in March and August saw Honda and Nissan collaborate on EV batteries and cutting-edge technologies, highlighting their strategic partnership.
Despite its potential, the Honda and Nissan’s merger plans raise concerns over job cuts and political scrutiny in Japan. Nissan is also likely to unwind its alliance with Renault as part of the integration process. Critics, including former Nissan chief executive Carlos Ghosn, labeled the merger an act of desperation. Both firms recognize the importance of uniting against a shifting automotive industry. As global markets evolve, they are determined to secure their future through innovation and collaboration.
