Japanese automakers Nissan Motor Corp and Honda Motor Co confirmed on Wednesday they are discussing closer cooperation, but denied reports that they have decided on a merger.
Nissan’s share price rose more than 22% in Tokyo after reports citing unnamed sources said it could merge with Honda to create the world’s third-largest automaker group. Honda’s share price fell by 3%.
Nissan alliance member Mitsubishi Motors Corp was included in the talks, the report said.
All three Japanese automakers announced in August that they had jointly researched software for electric vehicles, such as batteries, sharing components for electric vehicles, such as batteries, to better adapt to dramatic changes in the auto industry centered around electrification. Have planned. A preliminary agreement between Honda, Japan’s second-largest automaker, and Nissan, Japan’s third-largest, was announced in March.
Trading in Nissan shares was suspended, but resumed after the companies jointly issued a statement saying they were “considering various possibilities for future cooperation, But no decision has been taken.”
The merger could result in a whopping value of around $55 billion, based on the market capitalization of the three automakers.
Joining forces will help both companies gain scale advantages to compete with market leaders Toyota Motor Corp of Japan and Volkswagen AG of Germany.
Nissan has an alliance with Renault SA that is under review. Last month, it said it was cutting 9,000 jobs, or about 6% of its global workforce, and reducing global production capacity by 20% after reporting a quarterly loss of $61 million.
Earlier this month it reshuffled its management and Chief Executive Makoto Uchida took a 50% pay cut to take responsibility for the financial crisis.
He said Nissan needed to become more efficient and respond better to market preferences, rising costs and other global changes.
Honda reported that its profit in the first half of the April-March fiscal year fell nearly 20% from a year earlier as sales in China were hit.
The rise of Chinese automakers is shaking up the industry at a time when manufacturers are struggling to transition from fossil fuel-powered vehicles to electric vehicles.
Toyota plans to make 11.5 million vehicles in 2023, while Honda will make 4.2 million and Nissan will make 3.4 million. Mitsubishi Motors earned just over 1 million. Even after the merger, Toyota will remain the largest Japanese automaker.