(Reuters) -Japanese auto giants Honda Motor and Nissan Motor will begin negotiations to merge as they face rising competitors from larger world electrical automobile makers, the Nikkei newspaper reported on Tuesday.
The 2 firms have elevated ties in latest months as they face heavy competitors from Chinese language EV makers that has added stress on legacy manufacturers struggling to make sufficient revenue from their EV ventures.
Honda and Nissan issued an identical statements saying the report on merger talks by Nikkei was not introduced by both firms. Reuters has not independently verified the report.
“As introduced in March of this 12 months, Honda and Nissan are exploring numerous potentialities for future collaboration, leveraging one another’s strengths,” the businesses mentioned in separate statements, including they’ll inform stakeholders of any updates at an acceptable time.
Honda’s U.S.-listed shares rose 1.3% in afternoon buying and selling.
Nissan and Honda, Japan’s third and second largest automakers after Toyota, have been dropping market share in China. That nation accounted for nearly 70% of worldwide EV gross sales in November, with greater than 1.27 million in purchases for the month.
The 2 had mixed world gross sales of seven.4 million autos in 2023, however are grappling with challenges from EV makers, significantly in China, the place BYD and others have surged forward.
International automakers Common Motors and Ford Motor too have slowed investments on EVs as excessive borrowing prices and poor charging infrastructure hinder their adoption regardless of authorities incentives.
In Europe, Volkswagen is locked in acrimonious talks with its union over price cuts because it struggles with falling demand and rising prices.
The worldwide auto business can also be bracing for a possible rollback of EV pleasant insurance policies by incoming U.S. president Donald Trump, Reuters has reported.
Honda and Nissan in March agreed to cooperate of their EV companies, and in August deepened their ties, agreeing to work collectively on batteries, e-axles and different expertise.
The automakers need to function below a single holding firm and are anticipated to quickly signal a memorandum of understanding for the brand new merged entity, the Nikkei reported.
Honda and Nissan are additionally trying to usher in Mitsubishi Motors, by which Nissan is the highest shareholder with a 24% stake, below the holding firm, to create one of many world’s largest auto teams, the report mentioned.
The stakes of the 2 firms within the new entity, together with different particulars are to be determined later, Nikkei mentioned.
Any deal could possibly be the most important within the business because the $52 billion merger between Fiat Chrysler and PSA in 2021 to create Stellantis.
