Two major Japanese companies are partnering up. This partnership could ultimately have a Godzilla-sized impact on the auto industry.
Honda and Nissan, Japan's second and third largest automakers, respectively, have signed a memorandum of understanding to begin exploring a strategic partnership in the areas of vehicle electrification and intelligence.
Last year, Honda sold 3.98 million units and Nissan sold 3.37 million units. If the two companies combine, they could become the world's third-largest automaker.
Although this is not a merger per se, it could lead to a merger in the future as it allows for closer collaboration in the core components of software platforms and EVs.
Honda and Nissan began collaborating on the development of electric vehicles earlier this year.
The merger could be a savior for Nissan. As we've previously covered, the company is on the verge of collapse, with insiders saying it has a “12 to 14 month lifespan.”
To cut costs, Nissan has slowed production, cut thousands of jobs and sold a third of its Mitsubishi stock. But it may have all been too little, too late.
Nissan dealers, which were already selling cars at a loss, were dealt another blow with news that the company intends to close most of its standalone Infiniti showrooms in the United States and merge them into Nissan Showrooms. Infiniti is Nissan's luxury division.
Infiniti dealership owners could face millions of dollars in losses, while sales, service and office employees could lose their jobs.
This partnership will aim towards a future of electrified and intelligent mobility.
Last year, Honda sold 3.98 million units and Nissan sold 3.37 million units. A merger between the two companies could make it the world's third-largest automaker, behind Japanese rival Toyota Group, which sold 11.23 million vehicles last year, and Germany's Volkswagen Group, which sold 9.23 million vehicles.
Nissan also has a large stake in Mitsubishi Motors, a small Japanese automaker.
Nissan and French automaker Renault have been strategic partners for more than 20 years, but the relationship hit a rocky patch, especially after Japan's controversial arrest and imprisonment of Nissan Renault CEO Carlos Ghosn in 2018. It seems like it is.
We may never know the real story behind it, but the bad publicity definitely took a toll on Nissan. At least the partnership with Honda could bring some attention back to the product.
We will continue to watch this story unfold.
