Former Nissan CEO Carlos Ghosn expressed significant concerns regarding the potential merger between Nissan and Honda, predicting that Nissan would face severe repercussions in a partnership where it might be overpowered by Honda. During an interview on CNBC’s “Squawk Box Europe,” Ghosn articulated his belief that the merger could lead to “carnage” for Nissan due to overlapping interests and a lack of complementary strengths between the two companies. He emphasized that any potential synergies might primarily come from cost reductions, ultimately making Nissan bear the brunt of these changes.
The possibility of a merger has been under discussion since earlier this month, with both automakers confirming that talks for a business integration have started. Plans include the creation of a holding company that would oversee both brands and be listed on the Tokyo Stock Exchange. Honda, with a market capitalization significantly higher than that of Nissan, would likely take a dominant role in the new entity. Additionally, Nissan’s partner Mitsubishi is also considering joining this new group. Should the merger proceed, the combined organization would become the world’s third-largest automotive manufacturer by sales, trailing only Toyota and Volkswagen.
Both Nissan and Honda executives indicated that merging their operations could enable them to pool resources and enhance their competitiveness as the industry undergoes a significant shift towards electric vehicles (EVs) and advanced technology. They project that the merger could lead to improved profitability, potentially reaching 3 trillion yen ($19.1 billion) in the long run. However, Nissan is concurrently undergoing a major restructuring to reduce production capacity and cut jobs, which adds to the complexity of the situation.
Ghosn raised doubts about the viability of the merger, suggesting it reflects Nissan’s desperation rather than a strategic solution to its challenges. Meanwhile, financial analysts have highlighted that while the merger could promise vast opportunities, there are still many uncertainties to navigate, particularly regarding the integration of corporate cultures and operational frameworks.
In summary, while the merger discussions between Nissan and Honda have the potential to reshape the automotive landscape and enhance competitiveness in the EV sector, hurdles remain, including concerns about Nissan’s stability and the integration of both companies. The ongoing talks serve as a reminder of the significant pressures that the automotive industry faces as it evolves to meet new technological demands.
It is hopeful to note that this potential collaboration could lead to innovation and advancements in the electric vehicle market, which is crucial for the future of automotive transportation. By pooling resources, both companies may foster the development of cutting-edge technologies needed to thrive in an increasingly competitive environment.