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Nissan may be saved from bankruptcy! Honda and Nissan have confirmed rumors that they are pursuing a merger. The two companies wrote a joint press release that discussed the future of Nissan and Honda together. 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. The carmaker suffered a 90% loss in revenue from last year and Renault, who saved the carmaker from going bankrupt in 1999, has been slowly pulling away from Nissan. Since the news of the company’s struggles became public, there have been whispers about a potential business deal between Honda and Nissan. Now we know that they aren’t just rumors.
The two companies confirmed that they are pursuing a merger. While both Honda and Nissan will continue to operate as their own brand, they will be doing so under a new joint holding parent company. It’s possible that Mitsubishi (which is owned by Nissan) will also come on board for the merger. If that happens, it would become the world’s third-largest carmaker by sales volume. 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. Each company’s shareholders must approve of the merger and the approval could heavily rely on Nissan turning things around.
How the Merger Could Impact the Auto Industry
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Although Honda and Nissan are technically competitors in the car market, there are areas for both companies to contribute to each other. Nissan sells pickup trucks and SUVs that Honda doesn’t offer. Not to mention, it has some more experience in EVs, which are becoming increasingly popular. At the same time, Honda is stable from a financial standpoint whereas Nissan has been struggling.
Honda and Nissan were already planning to work together in 2025. The two carmakers announced that they planned to work together on electric vehicle components and software development. Working underneath the same parent company would make things much more streamlined. However, it may subsequently also lead to a number of layoffs and Japan and other places around the globe.
As mentioned above, Nissan has been in an alliance with Renault. The Renault-Nissan-Mitsubishi Alliance each held a 15% voting stake in the other. In 2017, the three carmakers sold more vehicles than any other manufacturer at 10.6 million worldwide. On top of that, this trio is one of the largest EV makers on the planet. If the Nissan and Honda merger moves forward, it isn’t clear what would happen to the alliance. However, it could be what saves Nissan from almost certain death.
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