Honda and Nissan merge to combat declining fortunes
Monday, December 23, 2024 at 6:34PM Honda, Nissan, and Mitsubishi are exploring a merger to counter declining sales and the rising electrification costs. This move follows years of declining profitability for Nissan, culminating in a 73% drop in first-quarter 2024 net profit. Nissan's market share has also eroded, particularly in the US electric vehicle market, holding a mere 2.4% share. To address this, Nissan recently announced a restructuring plan involving job cuts and capacity reductions.
A combined entity—led by Honda—could generate significant revenue and operating profit. However, past auto industry mergers have often been unsuccessful due to integration challenges and cultural clashes. This merger aims to avoid these pitfalls by prioritizing a slower integration process and maintaining a holding company structure.
