Nissan & Honda Confirm Fusion, Saving Nissan from Bankruptcy
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Nissan may be saved! Honda and Nissan confirmed the rumor that they were pursuing a merger. Here’s what has been revealed so far, plus details about Nissan’s next steps. Here is what has been revealed so far, plus details about what’s next for Nissan.
Where are Nissan & Honda in the Merger Discussions?
Earlier this month, it was reported that Nissan was looking down the barrel of bankruptcy. Renault, which saved Nissan from bankruptcy in 1999 by saving 90% of its revenue, is slowly separating itself from Nissan. There have been whispers of a possible business deal between Honda Nissan since the news about the company’s struggles was made public. We now know that these rumors are not just rumours. The two companies have confirmed they are working towards a merger. Honda and Nissan are both expected to continue operating as their respective brands, but under the umbrella of a new parent company. Mitsubishi, which is owned by Nissan, could also join the merger. The three brands would have a combined net worth of up to $50 billion. Together, the three brands would have a net worth of up to $50 billion.
“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future,” said Makoto Uchida, Nissan CEO.
The discussions regarding the merger are still in the preliminary stages, but the companies are pushing to make it happen. “We are still at the stage of starting our review and we have not decided on a business integration yet,” said Toshihiro Mibe, Honda director.
That said, he made it known that the companies are aiming to have the direction for the integration nailed down “by the end of January 2025.” Then, the business leaders are hoping to have an agreement regarding the merger by June 2025. The shareholders of each company must approve the merger. This approval may be heavily dependent on Nissan’s ability to turn things around.
How the Merger Could Impact the Auto Industry
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Although Nissan and Honda are technically rivals in the auto market, both companies can benefit from each other. Nissan offers pickup trucks and sport utility vehicles that Honda does not. It also has more experience with EVs which are becoming more popular. Honda has a stable financial position, whereas Nissan is struggling.
Honda & Nissan had already planned to collaborate in 2025. Both carmakers have announced their intention to collaborate on the development of electric vehicle software and components. It would be much easier to streamline things if they were under the same parent company. It may also result in a number layoffs in Japan and elsewhere around the world. As mentioned earlier, Nissan was in an alliance Renault. The Renault-Nissan-Mitsubishi Alliance each held a 15% voting stake in the other. In 2017, the trio sold 10.6 millions vehicles worldwide, more than any other carmaker. This trio is also one of the world’s largest EV manufacturers. It’s not clear what will happen to the alliance if the Nissan-Honda merger goes through. It could save Nissan from a near-certain death.
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