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Making the Honda Nissan merger work will be a heavy lift
Industry analysts are divided on whether the Honda Nissan merger will be a lifeline or a liability. (2 min. read)
At a recent press event, Honda CEO Toshihiro Mibe struggled to find the right words when asked why Nissan would make a good business partner, according to a report from InsideEVs. His pause, followed by, “That’s a difficult one,” captured the collective head-scratching after news of a Honda Nissan merger surfaced.
It was an unusually candid admission about the uncertainty surrounding this high-stakes move.
Why it matters: Honda is no stranger to success, with a solid hybrid lineup and promising early returns from its Honda Prologue EV. But the automaker is entering uncharted waters, hitching its future to Nissan, a company struggling with messy financials, disorganized dealerships, and a once-groundbreaking EV program now in decline.
Still — Mibe insists this isn’t a bailout.
Nissan’s established infrastructure and extensive manufacturing footprint could accelerate Honda’s shift to electrification.
For Nissan — Honda’s hybrid expertise offers a lifeline to modernize its aging portfolio and stabilize operations.
And consolidation could make both automakers more competitive with Chinese EV makers.
But analysts are divided on whether the Honda Nissan merger will be a lifeline or a liability.
Karl Brauer, executive analyst with iSeeCars.com, said that if Honda and Nissan can share resources, it could provide the scale needed to compete. “In the U.S. we can expect to see consolidation across vehicle platforms, drivetrains and even dealers to reduce costs,” he said.
“With the amount of overlap in these Japanese companies and inherent problems, this merger is like two weak swimmers helping each other swim across the English Channel,” David Kudla, CEO of Mainstay Capital Management said.
“If the Honda/Nissan deal was wildly successful (and that’s a big if, given their overlap), then GM and Ford get more isolated in terms of their size,” added David Whiston, auto analyst for Morningstar.
Zoom out: Mergers like this are rarely a cure-all. Stellantis — for example — is the product of a mega merger. And Honda and Nissan likely won’t see results for at least several years — leaving a lot of time for the competition to sprint ahead — and even more time for China to strengthen its dominance.
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