Not so long ago, information appeared that Nissan and Honda will join forces and create one of the largest automotive groups. However, the latest information calls the project into question because both companies are not sure what the merger would bring to them.

Honda is in a relatively good position when it comes to hybrid vehicles, but it does not show big ambitions in the EV segment. On the other hand, Nissan has the problem of an outdated electric model range, poor finances and management problems, while its advantages are a better production network, especially in Southeast Asia, and the Sakura model, which is achieving outstanding results in the domestic market. Honda’s partnership with GM collapsed after the bad start of the Prologue model, while its first independently developed long-range EV will not reach the market before 2026.

Those who know the situation at both companies better believe that their strengths could help both companies. However, there are also those who do not believe in this project. Automotive analyst Julie Boote of Pelham Smithers Associates says: “Honda needs to partner with another company to step up its efforts on electric vehicles and software-defined vehicles because it is a mid-sized automaker. Ideally, it would be a healthy and financially sound company, not Nissan.”

There are many reasons why the story of merging these two companies was started, and one of them is the protection of domestic manufacturers from foreign takeovers. Some believe Japan’s Ministry of Economy, Trade and Industry (METI) pushed the merger to stop rumors of a takeover of Nissan by Taiwanese technology company Foxconn. Former Nissan CEO Carlos Ghosn was also against it, saying: “It means you are putting control over performance. Personally, I don’t think it will be successful.”

Even if a merger happens, the entire process could be completed in about six months, while the first effects could be seen in three to five years, which is simply too long for the auto industry.

Source: Reuters