Peter Landers of The Wall Street Journal reports that Honda and Nissan plan to merge by 2026, forming the world’s third-largest automaker with Mitsubishi Motors. The partnership aims to cut costs and address rising development expenses for electric and autonomous vehicles. Landers writes:
Honda and Nissan said they planned to merge in 2026, a move Honda’s chief executive said wasn’t a rescue of troubled Nissan 7201 6.58%increase; green up pointing triangle but a recognition that developing new technologies was too hard to do alone.
The companies said they intended to create an automaker that, combined with Nissan partner Mitsubishi Motors, would be the third-largest carmaker in the world, after Toyota and Volkswagen, with more than eight million vehicles sold annually.
The announcement came at the end of a year in which Nissan’s profit has tumbled in part because of a dated model lineup in the U.S. Both companies have cratered in China, where electric vehicles and plug-in hybrids are growing quickly. Last year, China surpassed Japan as the world’s leading auto exporter by number of vehicles.
With the car industry moving toward autonomous vehicles driven by artificial intelligence, the companies said they needed to combine research and cut costs to survive. […]
The companies described the merger as a way to boost efficiencies, saying they would share production lines, buy the same parts in bulk and combine R&D projects. They said the merger wasn’t about making big job cuts in the U.S. or closing factories but didn’t rule out such steps.
Japan’s government has left no doubt about its support for a merger. […]
China has been encroaching on areas that Japan once dominated—both cars and components such as batteries—worrying Japanese officials.
About 8% of Japan’s working population is involved in automotive and related jobs, according to the Japan Automobile Manufacturers Association. Last year, the industry overall—including cars, trucks, motorbikes and components—accounted for more than a fifth of Japan’s total exports, the association said.
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