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Home / Metal News / Honda / Nissan merger? It is revealed that the Japanese government is lobbying.

Honda / Nissan merger? It is revealed that the Japanese government is lobbying.

iconAug 17, 2020 08:47

SMM: a few days ago, it is reported that the Japanese government is trying to promote the merger of Nissan and Honda. The main reason for the move is that the Japanese government is worried about the future of the country's auto industry.

According to people familiar with the matter, the proposal was first put forward at the end of 2019, and the Japanese government hopes to create a "national car champion", fearing that traditional car companies will lose their competitive edge as the automation and electrification of the auto industry accelerates. However, the merger plan did not proceed smoothly, and Nissan and Honda both rejected the proposal. Subsequently, the COVID-19 epidemic broke out, which also disrupted the government's process of promoting the merger plan.

Japan currently has eight major car brands, four of which (Mazda, Subaru, Suzuki and Daifa) have cross-shareholdings with Toyota, while Nissan has formed a tripartite alliance with France's Renault and Mitsubishi Motors. As a result, Honda has become the only car company in Japan that does not have a fixed alliance partner.

The alliance between Nissan and Renault has deteriorated since the arrest of former Nissan chairman Carlos Ghosn in 2018, and the Japanese government is worried that the alliance will be dissolved at any time, affecting social and economic development, according to people familiar with the matter. Another person familiar with the matter said Honda rejected the merger plan mainly because of its unwillingness to intervene in the directly complex capital structures of Nissan and Renault. In addition, Nissan also opposes the merger plan because it is working to get the existing alliance back on track. Nissan and Honda declined to comment as of press time.

Comments:

Industry analysts believe that the main obstacle to the merger is Honda's unique engineering design, which makes it impossible for Nissan to share its parts and platforms with other partners, and once merged, the alliance will not be able to save more costs. In addition, although the two companies are neck-and-neck in car sales each year, their business models are not the same, and Honda makes far more money from its motorcycle business than from its car business, making it easier for Honda to cope with the downturn than Nissan. Honda is also the world's largest engine maker, with products ranging from private jets to lawnmowers and marine engines.

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