Honda and Nissan to merge, Honda will take the lead

2 days ago 3

In 2019, then-head of the alliance Carlos Ghosn was arrested by Japanese police on charges of financial misconduct. After three months under house arrest, Ghosn fled the country and Japan's criminal justice system, which rarely returns a not guilty verdict.

What about Renault, Mitsubishi?

Last year, Nissan agreed to invest $663 million into Renault's EV activities; at the same time Renault gave up the majority of its shares in Nissan, reducing the stake of each company owned by the other, down to 15 percent. That was meant to lead to "a broader range of EV products and powertrains," said Uchida at the time. But evidently it was decided that this arrangement was not sufficient to improve Nissan's electric vehicle portfolio.

For its part, Mitsubishi says it will monitor the situation and decide whether or not to join at a later date. Meanwhile Renault said in a statement that "as the main shareholder of Nissan, Renault Group will consider all options based on the best interest of the Group and its stakeholders. Renault Group continues to execute its strategy and to roll-out projects that create value for the Group, including projects already launched within the Alliance."

Assuming nothing throws a spanner in these particular works, the deal will be finalized by next June, with the new holding company for the two OEMs created by August 2026. Honda will take the lead of the new enterprise, in large part thanks to its larger market capitalization. But Mibe said that any real payoff from the merger wouldn't be realized until after 2030. The hope is that shared development costs and greater purchasing scale will help drive down costs, but both companies will continue existing partnerships such as that between Honda-GM as well.

We can expect more shared vehicle platforms between Honda and Nissan, as well as deeper cooperation at the R&D stage. But there are also plans to optimize manufacturing, including facilities, as well as integrating supply chains and even sales financing to find cost savings and efficiencies.

Read Entire Article