Honda and Nissan Consider Partnership to Become the World’s Third Largest Automaker
Honda and Nissan are preparing to start a new chapter soon. It is reported that both companies are considering a manufacturing partnership, in which they will make vehicles in each other’s plants. If this partnership is successful, it will become the world’s third-largest automobile group.
According to Japanese news agency Kyodo News, Honda and Nissan are discussing their management integration. Both companies are considering manufacturing models in each other’s factories and other options for mutual production. Especially considering the lack of popular hybrid models of Nissan in the American market, Honda is also considering providing its hybrid vehicles to it.
Honda has only engine and motorcycle plants in Europe, while Nissan has four-wheeler manufacturing facilities in Britain. In such a situation, Honda is considering using Nissan’s facilities.
The Reason Behind the Partnership
Nissan is expected to see its operating profit fall to 150 billion yen (about $958.7 million) in fiscal year 2024, down 73.6% from the previous year. The main reason for this is that Nissan does not have hybrid vehicles popular in the US market. In addition, the demand for electric vehicles has also decreased, as the number of charging stations is still not enough.
However, Honda has linked this partnership with the improvement in Nissan’s performance. Honda has sought a “V-shaped” recovery from Nissan, so that both companies can earn more profits together.
The two companies are also planning to increase cooperation in the electric vehicle sector. Apart from this, they are also considering the possibilities of forming a holding company. Meanwhile, Taiwan’s Foxconn is in discussions to buy a stake in Renault’s Nissan, which may affect this partnership.
It will be interesting to see in which direction this collaboration goes and what impact it has on the global automobile industry.
