Japanese automakers Honda Motor and Nissan Motor are reportedly entering merger talks to help them compete against Tesla and others electric vehicle According to the Nikkei financial newspaper, the manufacturer.
According to Tokyo-based Nikkei, the two companies are considering operating under the same holding company and are expected to sign a memorandum of understanding for the new entity.
The newspaper also reports that Honda and Nissan are considering bringing Mitsubishi Motors, of which Nissan is the top shareholder, under a holding company to create one of the world's largest auto groups.
In a statement to CBS MoneyWatch, Nissan said it had not announced details in the report, but that the two companies are “exploring various possibilities for future collaboration, leveraging each other's strengths,” which He announced in March.
According to a statement sent to CBS MoneyWatch, Honda said it did not provide information in the report. “As announced in March this year, Honda and Nissan are exploring various possibilities for future cooperation by leveraging each other's strengths,” it said. “We will inform our stakeholders of any updates in due course.”
Honda did not immediately respond to CBS MoneyWatch's request for comment.
In March, Japan's No. 2 and No. 3 automakers behind rival Toyota deepened ties when they agreed to explore a strategic partnership on electric vehicles.
Analysts have described the move as aimed at helping automakers catch up with Chinese competitors, including BYD, which have captured more market share, while Japanese companies have focused more on hybrid vehicles. By doing this we have lost our land.
China overtook Japan to become the world's largest vehicle exporter in 2023, helped by its dominance in the electric car sector.
Honda announced plans in May to double its investment in electric vehicles to $65 billion by 2030, as part of a goal set three years ago to achieve 100% EV sales by 2040.
Similarly, in March Nissan announced it would “electrify” 16 of the 30 new models it plans to launch over the next three years.
Climate concerns drive demand
The world's auto giants are increasingly preferring electric and hybrid vehicles, with demand for less polluting models rising as concerns about climate change grow.
However, at the same time, consumer demand for EVs has slowed amid high prices, range concerns and infrastructure development around charging points.
Hybrids combining battery power and internal combustion engines remain popular in Japan, accounting for 40% of sales in 2022.
But Japanese companies' focus on hybrids has slowed them to meet the growing appetite for purely electric vehicles. Only 1.7% of cars sold in Japan in 2022 were electric, compared to 15% in Western Europe and 5.3% in the United States.