In a significant move to counter the rise of Chinese carmakers, Honda and Nissan are planning a merger. This collaboration aims to create one of the world’s largest car producers, joining the ranks of Toyota, Volkswagen, General Motors, and Ford. The multibillion-dollar deal will also involve Mitsubishi, where Nissan holds a significant stake, consolidating resources to challenge electric vehicle (EV) competitors like Tesla.
Honda’s chief executive Toshihiro Mibe described the merger as crucial to combating “the rise of Chinese power” in the automotive industry. He emphasised the urgency of a strategic plan by 2030 to avoid being “beaten” by rivals. Nissan’s chief executive, Makoto Uchida, highlighted the combined sales of the two firms, which exceed $191 billion, showcasing their potential strength in the market.
The rapid growth of the Chinese EV sector, led by companies like BYD, has significantly reshaped the global market. China’s low manufacturing costs and competitive pricing have made it the largest EV producer. In response, the European Union has imposed tariffs of up to 45% on Chinese EV imports to protect local industries, though this may raise prices for consumers.
Nissan and Honda began discussing an EV partnership in March and deepened ties in August, focusing on battery technology. However, challenges remain, including potential job cuts and political scrutiny in Japan. The merger also casts uncertainty over Nissan’s alliance with French automaker Renault.
While former Nissan CEO Carlos Ghosn criticised the merger as a “desperate act,” Mibe assured that the deal depends on Nissan’s turnaround and is not a bailout. The collaboration underscores the shifting dynamics of the global car industry amid growing Chinese dominance.
