Honda and Nissan are discussing a possible merger, potentially bringing together two Japanese automaking titans that have recently fallen on hard times.
“As announced in March, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” the companies said in a statement Tuesday. “If there are any updates, we will inform our stakeholders at the appropriate time.”
In March, Honda and Nissan announced that they would partner on electric vehicles and in August said they would collaborate on battery technology so that they could benefit from deepening their ties as both have faced challenges this year.
Both companies, like many non-Chinese automakers, have struggled in the once-promising China market, the world’s largest market for cars. Chinese consumers had flocked to foreign brands but have largely shifted to domestic brands, which have better perceived value in the country. China’s government has also provided incentives to help speed up customer adoption of electric vehicles and plug-in hybrids.
Although both companies offer EVs and plug-ins – Nissan, in particular, was a pioneer in EV technology – Chinese brands like BYD have eclipsed their technology and are priced more cheaply.
Meanwhile Honda, which is roughly five times the size of Nissan, also faces challenges. The company announced plans to sell only zero-emission vehicles in major markets by 2040. But the transition has been slow going, as relatively low gas prices, insufficient charging infrastructure and increased competition have dragged down demand for EVs in the United States and Europe.
