Japanese Automakers Explore Strategic Cooperation Options in Electric Vehicle Market
news
2 min read
Japanese Automakers Explore Merger to Address Uncertain Electric Vehicle Future
In a move aimed at bolstering their competitive edge in the rapidly evolving electric vehicle (EV) market, Japanese industry giants Honda and Nissan are in talks to merge. This development comes as both companies face significant challenges in the sector.
According to anonymous sources, the potential merger would involve splitting equity into a new holding company from which both firms would operate. Additionally, discussions have reportedly taken place regarding the possibility of bringing Mitsubishi on board, mirroring the collaborative model employed by various Japanese electronics brands.
The decision to explore a merger stems from Honda and Nissan’s desire to strengthen their position in the EV market. The two companies have been working together to develop electric vehicle technology and software, with Mitsubishi also invited to participate.
However, it is Nissan that finds itself in a more precarious situation. Net earnings for the company in mid-2024 dropped by over 90% year-on-year, leading to a significant reduction of nearly 70% in its annual operating profit forecast. In response, Honda and Nissan released statements confirming their collaboration discussions, stating that they are exploring various possibilities for future cooperation.
Honda is reportedly preparing to launch its new Honda Zero EV platform next year, with some success already seen in the US market via its General Motors-based electric Prologue SUV. Meanwhile, Nissan has struggled to capitalize on its early lead in the EV space, having only released a single other EV model, the Ariya, since its pioneering 2011 Leaf.
Both companies have been focusing more on hybrid models than full EVs within their product lines. This move is seen as an attempt to stay competitive while they navigate the changing automotive landscape.
As reported by Bloomberg, Japanese automakers are losing market share in regions stretching from China to Indonesia, as Chinese brands outpace US, European, and Japanese manufacturers.
Honda is expected to launch a hybrid Prelude sports coupe next year, with Nissan having announced plans for 16 “electrified” models by 2026.
Source: www.theverge.com
