Japanese government pushes Nissan and Honda merger

The Japanese government is trying to push Nissan and Honda into merger talks because it fears the Nissan-Renault-Mitsubishi alliance could collapse and jeopardize Nissan.

Late last year, senior Japanese officials tried to mediate discussions on the merger as they are concerned about the deteriorating relationship between Nissan and Renault, the report said.

Japanese Prime Minister Shinzo Abe's advisers are reportedly concerned that relations have "deteriorated a lot" that they could fall apart and leave Nissan in a vulnerable position. To strengthen the brand, a connection with Honda was proposed.

However, negotiations on the merger collapsed almost overnight: both Nissan and Honda abandoned the idea, and after the pandemic, both companies turned their attention to something else.

Nissan, Honda and the Office of the Japanese Prime Minister declined to comment.

While the reason for the failure of the talks has not been confirmed, it is likely because Honda's unique engineering makes it difficult to share parts and platforms with Nissan, which means the Nissan-Honda merger will not provide significant savings.

An additional obstacle to a successful alliance is that the two brands have very different business models. Nissan's core business is focused on automobiles, and Honda's diversity means markets such as motorcycles, power tools and gardening equipment play a large role in the overall business.

In recent years, more and more automakers have joined forces in an effort to strengthen their position in the deteriorating global market. Last year, PSA Group and Fiat Chrysler Automobiles confirmed a merger to create Stellantis, the world's fourth largest automobile manufacturer.

Most recently, Ford and Volkswagen forged a comprehensive global alliance involving two companies working together on electric vehicles, pickup trucks, vans and autonomous technologies.