Tokyo : Japanese automobile manufacturing companies Honda and Nissan have announced merger. After this, this company can move towards becoming the third largest automobile company in the world in terms of sales.
It is noteworthy that the vehicle industry is currently going through a phase of major change. On one hand it is moving away from dependence on biofuels, on the other hand it is facing intense competition from Chinese rivals. Both the companies said that they have signed a Memorandum of Understanding or MOU on Monday. Nissan's smaller alliance member Mitsubishi Motors has also agreed to join talks to integrate their businesses.
Nissan Chief Executive Officer Makoto Uchida said in the statement that we hope that if this integration is successful, we will be able to provide even greater value to a broader customer base.
Vehicle manufacturing in Japan has lagged behind its bigger competitors in the electric vehicles sector and is now trying to cut costs and recover losses. News of a possible merger surfaced earlier this month. Unconfirmed reports said talks on closer cooperation were partly motivated by Taiwanese iPhone manufacturer Foxconn's aspirations to tie up with Nissan. Nissan has alliance with France's Renault SA and Mitsubishi.
Based on the market valuation of the three vehicle manufacturing companies, the merger could create a big company worth more than $50 billion. The alliance of France's Renault SA and small vehicle maker Mitsubishi Motors Corp with Honda and Nissan will help it compete with Toyota Motor Corp and Germany's Volkswagen AG.
Toyota has technical partnerships with Japan's Mazda Motor Corp and Subaru Corp. Even after the proposed merger, Toyota will remain Japan's leading vehicle manufacturer. It had manufactured 1.15 crore vehicles in 2023. On the other hand, Nissan, Honda and Mitsubishi together will make 80 lakh vehicles. Nissan, Honda and Mitsubishi announced in August that they would share components such as batteries for electric vehicles.
(with agency input)
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