Japanese Honda and Nissan to start merger negotiations, stories Nikkei

(Reuters) – Japanese auto giants Honda Motor and Nissan Motor will start merger talks as they face rising competitors from the world’s largest electrical automobile makers, the Nikkei newspaper reported on Tuesday.

The 2 firms have strengthened ties in latest months as they face stiff competitors from Chinese language electrical automobile makers, growing stress on conventional manufacturers struggling to reap sufficient earnings from their electrical automobile tasks.

Honda and Nissan issued similar statements claiming that the Nikkei report on merger talks was not introduced by both firm. Reuters has not independently verified this data.

“As introduced in March this 12 months, Honda and Nissan are exploring numerous alternatives for future collaboration, leveraging one another’s strengths,” the businesses mentioned in separate statements, including that they might notify stakeholders of any updates. in a well timed method.

Honda’s U.S.-listed shares rose 1.3% in afternoon buying and selling.

Nissan and Honda, Japan’s third and second largest automakers after Toyota, have misplaced market share in China. The nation accounted for practically 70% of worldwide electrical automobile gross sales in November, with greater than 1.27 million purchases for the month.

The 2 collectively offered 7.4 million automobiles worldwide in 2023, however are grappling with challenges from electrical automobile makers, significantly in China, the place BYD and others have pulled forward.

International automakers Basic Motors and Ford Motor have additionally slowed investments in electrical automobiles as excessive borrowing prices and poor charging infrastructure hamper their adoption regardless of authorities incentives.

In Europe, Volkswagen is engaged in acrimonious negotiations with its union over value reducing because it faces falling demand and rising prices.

The worldwide auto trade can also be bracing for a doable rollback of pro-electric automobile insurance policies by new U.S. President Donald Trump, Reuters reported.

Honda and Nissan agreed in March to cooperate of their electrical automobile companies and deepened ties in August by agreeing to work collectively on batteries, electrical axles and different applied sciences.

The automakers are looking for to function beneath a single holding firm and are anticipated to quickly signal a memorandum of understanding for the brand new merged entity, the Nikkei reported.

Honda and Nissan additionally plan to combine Mitsubishi Motors, of which Nissan is the biggest shareholder with a 24% stake, into the holding firm to create one of many world’s largest car teams, in keeping with the report.

The 2 firms’ stakes within the new entity, in addition to different particulars, might be determined later, Nikkei mentioned.

Any deal may very well be the trade’s largest since Fiat Chrysler and PSA’s $52 billion merger in 2021 to create Stellantis.

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