Nissan-Honda merger almost happened
Japanese government sought tie-up with Honda over fears Renault-Nissan-Mitsubishi Alliance was about to fall apartTop Japanese government officials attempted to force Nissan and Honda into merger talks because it feared the Renault-Nissan-Mitsubishi Alliance had reached breaking point.
According to the
, the Japanese government sought to intervene and attempted to push Nissan into merger talks with Honda because it thought that if the Nissan-Renault tie-up failed it would leave Nissan ‘exposed’.Fuelling the fears that Renault would part company with Nissan, Nissan Japanese prime minister, Shinzo Abe, reportedly had personal concerns that the relationship between the two car-makers had “soured so badly” that a break-up was inevitable.
Despite government intervention, the FT says the Honda-Nissan merger talk collapsed almost instantly when both brands rejected the idea of joining forces. Then the pandemic hit and Nissan and Honda turned their attention to implementing emergency measures.
The proposed Nissan-Honda tie-up, it’s been reported, aimed to strengthen both brands and presumably prevent the ailing Nissan being snapped up by a Chinese brand.
Nissan, Honda and the Japanese government have all declined to comment on the report.
The biggest obstacle to the two brands combining forces wasn’t the unwillingness of the senior execs of both brands, but the difficulty of sharing parts and platforms, with both Honda and Nissan’s engineering strategies completely at odds with one another's.
That would have meant a Nissan-Honda tie-up would not achieve the economies of scale needed for it to be viable.
Honda’s sheer diversity of offerings would also reportedly have made the merger unwieldy and problematic to manage.
In 2019, Honda and its Acura brand sold more than 1.5 million vehicles globally. The car-maker also manufactures motorcycles, ATVs, power tools, lawn mowers, generators, solar cells, aircraft, robots, mountain bikes among others.
In the same year, the Renault-Nissan-Mitsubishi Alliance sold almost three million vehicles combined, making it the world's third largest car-maker behind only Toyota (3.1m) and the Volkswagen Group (3.3m).
Following the failed merger attempt, plunging auto sales amid the pandemic may yet force Honda to bed another car-maker to help share the spiraling R&D costs required to migrate to pure-electric and autonomous vehicles.
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