SEOUL, South Korea — Japanese automakers Honda Motor Co. and Nissan Motor Corp. announced Monday their intention to merge by 2026 and create the world’s third-largest car-making operation by sales.
In addition, Japan’s Mitsubishi Motors Corp., of which Nissan is the leading shareholder, is considering joining the mega-firm, the three companies’ executives said at a press conference in Tokyo.
The proposed merger would create an automaking company that would trail only Japan’s Toyota Motor Corp. and Germany’s Volkswagen Group in global sales.
Honda, Nissan and Mitsubishi sold a combined total of more than 8 million vehicles in 2023, Japan’s Kyodo News reported. Toyota sold 11.23 million vehicles, and Volkswagen sold 9.24 million.
The announced merger appears to be a reaction to the ever-increasing strength and expanse of China’s economy, the world’s second-largest, as well as competition from other countries.
“The rise of Chinese automakers and new players has changed the car industry quite a lot,” Honda CEO Toshihiro Mibe said Monday. “We have to build up capabilities to fight with them by 2030, otherwise we’ll be beaten.”
Mr. Mibe cited technological trends — electric vehicles and autonomous driving — as core drivers of the merger.
The global auto industry is warily looking at “smartphones on wheels” or “connected, autonomous, shared, electric” (CASE) as the future of vehicles.
Honda and Nissan have lagged behind competitors such as America’s Tesla Inc. and China’s BYD Auto Co. Ltd. in producing electric vehicles, which are attractive in places that regulate exhaust emissions such as the European Union.
Japanese media noted that a merger would cut the individual firms’ development and component costs amid the emerging landscape.
But some say the merger is less a strategic approach to industry trends and more an officially mandated rescue operation driven by protectionism.
Nissan has been hobbled since its alliance with French giant Renault collapsed; last year, it saw profits implode and has announced 9,000 job cuts.
Nissan’s former chairman, Carlos Ghosn, was scathing about the proposed merger.
“They are strong in the same fields. They are weak in the same fields,” Mr. Ghosn said of the two big firms, per Kyodo News. “There is duplication everywhere. So industrially, for me, it doesn’t make sense.”
Mr. Ghosn, who fled from Japan to Lebanon in 2019 while facing financial misconduct charges, alleged that Honda had been pressured by Japan’s Ministry of Economy, Trade and Energy to make the deal.
Specialist auto industry media Carsnoops noted that while some might accuse Mr. Ghosn of sour grapes, he had signaled a Honda-led deal as early as August.
• Andrew Salmon can be reached at asalmon@washingtontimes.com.
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