Nissan and Honda are discussing a combination.

Nissan and Honda are

Nissan and Honda are discussing a combination.

According to reports. Honda and Nissan have discussed the possibility of merging. In order to better compete with. EV manufacturers, especially in China.

The two Japanese automakers decided to look into a strategic alliance for EVs in March.

“As announced in March of this year, Honda and Nissan are exploring numerous possibilities for future collaboration. Using each other’s strengths,” the companies said in similar statements in response to the BBC.

It occurs as the industry transitions from gasoline and diesel automobiles to electric ones. With production in China booming, and many automakers struggle with increased competition.

After the story was initially published by the Nikkei, a Japanese business publication, Honda and Nissan stated that it was “not anything that has been declared by either firm” but did not deny it.

There is no assurance that a deal will be reached because the talks are still in their early phases.

“We will notify our stakeholders at the right time if there are any updates,” they continued.

According to Japanese TV channel TBS, the two businesses could formally acknowledge that they had held the conversations as early as next week.

According to a Bloomberg story, Foxconn approached Nissan about the iPhone manufacturer acquiring a majority share in the automaker. Nissan chose not to respond. A BBC request for comment was not immediately answered by Foxconn.

For a number of reasons, a possible merger between the top two and third-ranked automakers in Japan might be challenging.

Given the possibility of significant job losses, any agreement is likely to be subject to close political examination in Japan. Additionally, Nissan will probably have to end its partnership with French automaker Renault.

In March, Honda and Nissan decided to collaborate on their electric vehicle (EV) companies. In August, they strengthened their relationship by deciding to collaborate on batteries and other technologies.

The two businesses also announced an agreement to talk about electrification and intelligence with Mitsubishi Motors in August.

Additionally, the Nikkei stated that Mitsubishi might eventually be included in any possible alliance between Nissan and Honda. The largest shareholder in Mitsubishi is Nissan.

On Wednesday, Nissan’s stock increased by over 23% in Tokyo.

Mitsubishi’s stock increased by about 20%, while Honda’s dropped roughly 3%.

“In order to exist—and not just to survive, but also to fund the future—it is kind of vital.”

In China, which accounted for over 70% of all EV sales worldwide in November, Honda and Nissan have been losing market share.

Together, the two brands sold 7.4 million cars worldwide in 2023. But they are finding it difficult to compete with less expensive EV manufacturers like BYD. Whose quarterly revenues have soared and surpassed Tesla’s for the first time in October.

Jesper Koll of Monex Group, a Japanese operator of online trading platforms, asked if a combination would increase the companies’ competitiveness.

“Is this merely a reorganization of the Titanic’s deck chairs in the sense that neither Nissan nor Honda have any products or technologies that appeal to consumers around the world?”

“It is a good rescue from that angle, but it is not producing a new national champion.”

Peter Hoskins provided more reporting.