Honda and Nissan merger talks about Nikkei reports

Nissan Motor Stocks rose on Wednesday after… Media report With which the struggling Japanese automaker is looking to merge Honda MotorsAnd forming a larger entity that can compete with larger competitors and invest more in the growing market for electric vehicles.

Nissan shares rose in recent trading by 22%, while Honda shares fell by 1.6%.

Honda and Nissan are considering working as a holding company and will soon sign a memorandum of understanding, according to a report in The Independent. Nikkei newspaper. They’re also looking forward to bringing them on eventually Mitsubishi MotorsNissan is the largest shareholder with a 24% stake in the holding company, according to the report.

The merger, if successful, would be particularly beneficial for Nissan, which has previously announced plans for it 9,000 jobs were eliminated Reducing global production capacity by one-fifth amid fierce competition in its main markets.

Joe McCabe, president and CEO of AutoForecast Solutions, told CNBC on Wednesday that Nissan needed to be “revitalized” after its relationship with Nissan. Renault He went sideways.

“They (Nissan) didn’t actually have a leadership position in any of the segments in which they competed,” he said.

Nissan said in a statement that media reports that it is “considering business integration” with Honda are not based on an announcement from our company. Nissan said it is examining various possibilities for future cooperation with Honda and Mitsubishi, but no decisions have been made. shares Mitsubishi The latter was up 14%.

The Nissan, Honda and Mitsubishi joint venture will equate to more than 8 million vehicle sales annually, according to Nikkei. This would place the company among the largest automakers in the world, but it is still less than its Japanese counterpart toyota motorin 11.2 million In 2023, so will the German automaker Volkswagenwhich last year announced sales 9.2 million Vehicles.

The merger report comes after the two Japanese automakers entered into a strategic partnership earlier this year on shared vehicle components and software.

Such a tie-up would be the largest auto industry merger since Fiat Chrysler joined France-based PSA Groupe to form excellent In January 2021.

-Michael Wayland contributed to this report.