Nissan and Honda in talks on closer collaboration

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Japanese automakers Nissan and Honda confirmed yesterday that they are discussing closer collaboration but denied reports they have decided on a merger.

The reports said that Nissan alliance member Mitsubishi was included in the talks.

All three Japanese automakers announced in August that they planned to share components for electric vehicles like batteries and jointly research software for autonomous driving to adapt better to dramatic changes in the auto industry centered around electrification.

A preliminary agreement between Honda, Japan's second-largest automaker, and Nissan, third largest, was announced in March.

A merger could result in a behemoth worth about $55 billion based on the market capitalization of all three automakers.

Joining forces would help the two companies gain larger scale to compete with Japan's market leader Toyota and with Germany’s Volkswagen.

Nissan last month, it said it was slashing 9,000 jobs, or about 6percent of its global work force, and reducing global production capacity by 20 percent after reporting a quarterly loss of 9.3 billion yen ($61 million).

Honda reported its profits slipped nearly 20% in the first half of the April-March fiscal year from a year earlier, as sales suffered in China.

The ascent of Chinese automakers is shaking up the industry at a time when manufacturers are struggling to shift from fossil fuel-driven vehicles to electrics.

Toyota made 11.5 million vehicles in 2023, while Honda rolled out 4.2 million and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million. Even after a merger Toyota would remain the biggest Japanese automaker.