Times are certainly tough in the automotive industry these days, with automakers facing increased competition from China, coupled with various macroeconomic pressures and weak demand for all-electric vehicles that many invested heavily in, to boot. As such, some automakers are choosing to team up and pool resources – including Ford and Volkswagen, a relationship that has thus far proven quite fruitful. However, it now seems as if two other major automakers – Honda and Nissan – are considering going so far as to explore a merger in what amounts to somewhat shocking news.
According to Nikkei Asia, Honda and Nissan are planning to enter negotiations pertaining to a possible merger, which would operate under a holding company. The companies reportedly plant to sign a memorandum of understanding soon with an eye toward hammering out a concrete deal, though as of now, it’s unclear how much of a stake in the new company each entity would hold. The move is reportedly being considered as a way to pool resources and better compete against Tesla and Chinese EV automakers moving forward.
This news may come as a surprise, but as Ford Authority reported last month, Nissan has been mired in financial difficulties for some time now, which prompted it to announce that the automaker plans to reduce its global work force by 9,000 workers. These moves are intended to help Nissan reduce its costs by $2.6 billion while also maintaining a heathy free cash flow. In the meantime, Chinese automaker BYD has grown by leaps and bounds, and is even on track to exceed Honda and Ford in terms of global sales by the conclusion of 2024 – a rapid rise, particularly given the fact that it doesn’t compete in nearly as many markets as those two.
This certainly may not be the last time we see such a merger or similar action, however. As Ford CEO Jim Farley predicted over two years ago, the EV transition may wind up spurring quite a bit of industry wide consolidation, as the executive stated. However, Farley also poured cold water on the notion that The Blue Oval may collaborate with other automakers aside from Volkswagen just this past September, too.
Comments
The first of many. There are too many car companies and too much competition and not enough buyers. Today is like it was 100 years ago. Everyone got into the car game, and then there was too much of a good thing. And then many went out of business or merged into the companies we still have today.
IMHO (and I can hear the hate now) GM and Ford should merge into a new “American Motors.” The auto industry is really a country-to-country competition, more akin to the Olympics. It is Team USA versus Teams Japan, Korea, Germany, and now China.
I would rather two American companies merge than have a merger like Daimler-Chrysler, Fiat-Chrysler, then Stellantis. The old Chrysler Corporation is no more and is likely to shed the Chrysler and Dodge brands. I am not advocating for Ford and GM to merge but it is better than what has happened to Chrysler.
If this works out, that’ll leave Stellantis, VW and Ford (yes, Ford) as the only lone souls and none in the best of shape. Even Wall Street is now worried about Ford. Either Jim and Billy can’t work with others or no one wants to work with them, but Ford had best learn how to and quick. All they do is discontinue models or cancel plans and then blow hot air about more unwanted EVs or boy-racer-niche-trims. Not good.
Iam sure VW will take complete control of Ford with in 5 years. Iam employed by a large German owned company and I asure you lot of top Ford heads will roll real fast when this take over is done.