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Japan’s Nikkei has reported that two of the world’s largest automakers may be in merger talks.
Honda and Nissan represent the second and third largest Japanese automobile companies – behind only Toyota in global sales volume.
Still, Nissan has notably lost its footing in the past year. Last month, the automaker reported a net earnings decline of more than 90% for the first half. In turn, Nissan cut its profit forecasts significantly and axed thousands of jobs.
Meanwhile, despite posting a disappointing second quarter, Honda increased its guidance in a sign of strength for the full fiscal year.
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So could a Honda merger take some of the pressure off of fledgling Nissan? Perhaps, though there is still very little detail available. Reuters reported that Honda and Nissan each “issued identical statements” saying no merger had been announced, though they did suggest they’d inform stakeholders of any updates relating to previously announced collaboration goals.
In March of this year, the two firms revealed that they’d be jointly developing electric vehicles and other modern technologies. At the time, Honda President Toshihiro Mibe said the companies share common values and could create "synergies" to help them compete with rivals, all while maintaining their own products.
Edmunds analyst Jessica Caldwell suggested to Reuters that partnerships and mergers like the aforementioned might be the next stage of an automotive market stressed by global competition and heavy pressures for investment in new technologies.
“The thought that some of these smaller players can survive and thrive is getting more challenging … adding that consolidation might be necessary “not only to survive, but also just to afford the future."
Reuters says any tie-up would be the biggest in the industry since the 2021 merger between Fiat Chrysler and PSA to form Stellantis – a deal that rang in at $52 billion.
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