HONDA NISSAN AND MITSUBISHI MERGER IMPACT ON U.S.
We were shocked like most when we heard that Honda and Nissan have officially entered merger talks. This merge would create the world's third-largest automaker by sales.
With a successful merger, who knows the crazy new models we would get. Would the 3 be able to turn out cars like the combined Toyota/Subaru BRZ/GR86? Or is the strategic alliance trying to rise above competition from Chinese electric vehicle (EV) manufacturers? And what would this mean for the U.S. who drives top sales???
A BRIEF HISTORY
Honda Motor Co., Ltd., established in 1948, initially gained recognition as a leading motorcycle manufacturer before expanding into automobiles. Over the decades, Honda has been celebrated for its engineering excellence and innovation, producing iconic models like the Civic and Accord. At one time the founder made piston rings for Honda, so this new merger is quite interesting…
Nissan Motor Co., Ltd., founded in 1933, has a storied history of producing a diverse range of vehicles under the Nissan and Infiniti brands. The company has been a pioneer in the EV market with its Nissan Leaf, which surprisingly became the best-selling all-electric car when it was introduced, but other companies like Telsa have crushed any new EV efforts.
Mitsubishi Motors Corporation, established in 1970, has been known for its robust lineup of vehicles, including one of the most famous Lancer Evolution series which has been showcased in many rally series. In 2016, Nissan acquired a controlling interest in Mitsubishi, integrating it into the Renault–Nissan–Mitsubishi Alliance.
HOW WILL THEY MERGE? WHO’S IN CHARGE?
The merger discussions between Honda and Nissan seem to be driven by cost efficiencies and to better compete with Chinese EV manufacturers. China still holds the record for highest number of car sales. Nissan has faced financial challenges and continues to experience declining sales and profitability which is what’s really driving this merger.
Mitsubishi Motors had also considered joining the merger; however, they have concerns about maintaining the ability to create their iconic vehicles without being forced to change. Uncertainties surrounding Nissan's restructuring have led Mitsubishi to contemplate remaining independent while continuing collaborations with both Honda and Nissan. We will likely hear more after January 2025…
IMPACT ON THE U.S.
The potential merger is anticipated to have significant impact for the U.S. automotive market. A combination of Honda and Nissan aim to enhance EV offerings, but they will have a tough time competing with Tesla and now Ford.
However, the consolidation may lead to restructuring efforts within U.S. operations. Nissan has already announced cost-cutting measures, including offering buyouts and reducing shifts at three U.S. plants. Who knows, with tariff discussions on the table from the new 2025 US presidency, they might reconsider.
Industry analysts suggest that the merger could result in a more competitive entity capable of rivaling major global automakers such as Toyota and Volkswagen, but Americans will want something that doesn’t look like a Prius or Leaf.
THE FUTURE…
The group has signed a memorandum of understanding, so they have already started to review the complexities of the merger. The MOU’s main focus will be leveraging synergies in electrification and intelligent mobility. The outcome of these discussions will be pivotal in shaping the future of the automotive industry and I hope we finally see more iconic Japanese motorsports that can compete with Toyota and Subaru.
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