Former Nissan CEO Carlos Ghosn has expressed serious concerns regarding a potential merger between Nissan and Honda, predicting significant cost-cutting “carnage” for Nissan. Speaking to CNBC, Ghosn stated that such a partnership would likely favor Honda due to the extensive overlap between the two automakers, potentially leading to Nissan becoming the more vulnerable partner in any combined effort. Ghosn, who previously presided over the Nissan-Renault-Mitsubishi alliance, emphasized that without meaningful complementarity, the likelihood of sustained synergies is diminished, suggesting that cost reductions would solely benefit Honda.
Recent speculation about a merger intensified after Nissan and Honda confirmed they were in talks to explore business integration, potentially leading to the creation of a holding company that would oversee both brands. This new entity, if established, could position itself as the world’s third-largest automaker by vehicle sales, surpassing South Korea’s Hyundai, while also addressing the rising costs associated with developing electric and autonomous vehicles.
Both companies have stressed that by merging, they can pool their resources and enhance competitiveness in the electric vehicle market, aiming for long-term operating profits of around 3 trillion yen (approximately $19.1 billion). However, this effort comes amid Nissan’s significant restructuring plans, which include reducing global production capacity by 20% and eliminating 9,000 jobs.
Ghosn portrayed Nissan’s potential merger as an indication of panic, suggesting the company is searching for external assistance to recover from its current predicament. Despite this sentiment, Honda’s CEO acknowledged shareholder concerns and assured that the talks would only proceed if the two companies could sustain themselves independently.
With the details of the merger still under development, analysts highlight the importance of fully integrating the two entities. The success of such a merger hinges not just on strategic alignment but also on merging cultures, assets, and personnel.
In a challenging time for automakers, this unfolding scenario presents an opportunity for both companies to redefine their strategies. If executed properly, it could bolster their competitiveness and adaptability in a rapidly evolving automotive landscape. The combined strength might pave the way for innovations that could benefit consumers and contribute positively to the broader industry.
Summary: Carlos Ghosn warns that a merger between Nissan and Honda could disadvantage Nissan. Both companies are exploring a partnership that may enhance competitiveness in electric vehicle development, potentially resulting in significant market positioning. While there are concerns about Nissan’s position and the uncertainty surrounding the integration process, the merger could represent a strategic opportunity for growth and innovation in the automotive sector.