Honda's potential merger with Nissan in 2021 would represent one of the biggest shocks to the industry since the creation of Stellantis. but there are high risk also includes.
On Tuesday in Las Vegas, during a roundtable discussion with select media, Honda executives provided some more details about the merger, which includes combining resources and factories to help the companies remain competitive in the increasingly costly battle with China. Can get.
Honda is concerned about China's rapid growth as a major and highly competitive player in the EV and autonomous driving sector. In late December, when Honda and Nissan announced that they had Signed an MoU to create a nearly $50 billion automotive company, Honda CEO Toshihiro Mibe said That “the rise of Chinese automakers and new players has significantly changed the car industry… We have to build the capabilities to fight them by 2030, otherwise we will lose.”
Honda officials gave some more details about the merger
The stakes are also high. According to a recent report by S&P Global MobilityThe global EV market will grow nearly 30 percent year on year, with 89.6 million new EVs expected to be sold this year. according to Affiliate Market ResearchThe global autonomous vehicle market is expected to reach approximately $60.3 billion in 2025 and is projected to reach $448.6 billion by 2035. If Japanese automakers want to dominate the market like they did in the 1960s, they will have to iterate quickly and get products into the hands of consumers.
“Since the beginning of last year, we have been in talks with Nissan,” Honda director and executive vice president Noria Kaihara said through a translator after the company's two-company debut. “Production prototypes,” Honda 0 saloon and Honda 0 SUV at CES“Nothing has been decided but we are discussing how to proceed.”
Honda wants Nissan's big SUVs and underutilized factories
During the roundtable, Kaihara said Honda is looking to Nissan as a way to reduce costs around future software-defined vehicles (SDVs).
“We have significant labor and development costs, and if there are operations we can share, that would be good for us,” he said. Developing brand-new software, including advanced driving systems that move closer to autonomous vehicles and battery-electric vehicles, is both increasingly important to the longevity of established automakers and increasingly expensive, he added.
Honda also said that large SUVs like Nissan's Armada and Pathfinder make it an attractive partner. Toshihiro Akiva, vice president and head of Honda's BEV development center, said through a translator that Honda's hybrid technology is solid but currently only exists in midsize vehicles like the CR-V and Accord. The company is interested in Nissan's larger vehicles because Honda's “motor and battery capacity can be optimized for a larger vehicle.”
While Honda has the Prelude, that vehicle was part of $5 billion joint venture with GM Which lasted only till the development of two vehicles. the introduction has been A surprise EV hitSales of more than 33,000 in 2024 and more sales than the larger gas-powered Honda Passport.
since Partnership with GM successfulIt is unlikely that the Prologue will remain in production for long, although Honda has not made any announcements regarding its plans for the vehicle. Honda doesn't currently offer an all-electric crossover outside of the Prologue, though fans of the brand have been clamoring for an all-electric CR-V for years.
Nissan, on the other hand, saw this Earnings declined by 90 percent last yearDue to which he was forced to fire thousands of employees. The company has been struggling since the arrest of former Nissan CEO Carlos Ghosn in 2018 on charges of financial misconduct. Not surprisingly, Ghosn is not happy with the news, Say bloomberg Nissan was in a “state of panic”, calling the deal a “desperate move” and saying that “it is difficult to reconcile the two companies.”
But as Honda executives said at the roundtable, Nissan's struggles could create an opportunity for Honda, too. This is because Honda plants serving the US are currently running at maximum capacity, and they can use excess capacity at Nissan factories to meet customer demand. “I am in no position to comment [on Nissan]But they have the potential,” Kaihara said.
Trump's tariff threats and the loss of EV incentives
Newly elected President Donald Trump threatens to impose tariffs on foreign imports and eliminate federal subsidies. It also helped Americans save billions in EV costs In conversation. “If Trump influences future government strategy, we will have to be very flexible on cutting or withholding subsidies,” Kaihara said.
It includes where Honda designs and produces its most popular vehicles, such as the CR-V and Civic. “Every factory in Canada and Mexico is almost at full production levels,” Kaihara said. “It is not so easy to change that direction, but depending on the tariff situation, we may have to change the production location to Japan or elsewhere.”
Such a significant move would be costly and could lead to higher prices for consumers when they go to buy their next Honda.
Despite all this, Honda is not backing down from its commitment towards electrification. “For now, we will have new EVs for the Zero series next year,” Kaihara said. “I think that for the long term, given the environmental issues, EVs will be the solution of the future, and it will not be replaced.”