Honda, Nissan, and Mitsubishi unite to reclaim market edge
Honda, Nissan, and Mitsubishi are joining forces to address the challenges of the global automotive market. This merger will create a new Japanese holding company aimed at boosting the competitiveness of these brands on the world stage. The process is expected to be completed by August 2026, according to rp.pl.
The newly formed holding company aims to strengthen the position of Japanese brands in global competition against corporations like Toyota and Chinese automotive giants. All three companies will be a part of the holding, continuing to operate independently while maintaining their brands. Toshihiro Mibe, CEO of Honda, emphasized that the new group's operating profit will initially be one trillion yen, with growth prospects reaching three trillion yen in the coming years.
Honda and Nissan have been under pressure from Chinese manufacturers, who are increasingly successful at capturing international markets. Nissan's issues were compounded by unsuccessful investments in the American market and an outdated hybrid model lineup. Meanwhile, Honda was forced to cut production in China, and Mitsubishi completely withdrew from this market.
Experts suggest that creating a joint holding will enable economies of scale, cost optimization, and more effective competition with the biggest players in global markets.
Mitsubishi, 24.5% owned by Nissan, signed an agreement to join the holding. Details about its role within the structure will be revealed in January 2025. Honda also plans to buy back its shares valued at 1.1 trillion yen, strengthening its position in the newly formed group.
Nissan CEO Makoto Uchida noted that the merger does not mean abandoning efforts to fix its own business. Nissan had previously attempted to implement remedial programs, but internal issues hampered these plans, including a scandal involving former chairman Carlos Ghosn. Ghosn, currently residing in Beirut, criticized the merger of the three companies as unprofitable, according to rp.pl.
Layoffs at Nissan
Nissan, the third-largest car manufacturer in Japan, announced in November a reduction in employment by 6.7% and a 20% decrease in global production capacity.
The Japanese corporation faces several troubles, one of which is misjudging the demand growth for hybrids in the United States. Unlike Toyota, which has fared better, Nissan's financial situation hasn’t improved, particularly due to the dominance of China's BYD in the Chinese market.
Makoto Uchida, the Japanese corporation's CEO, admitted to a mistake in forecasting the growth of hybrid car popularity.
Uchida announced layoffs affecting 9,000 employees, equating to 6.7% of the company’s 133,500 workers worldwide. He will also "voluntarily" face consequences, receiving half of his salary since November. Other executive committee members, as reported by Reuters, have also decided to reduce their salaries.
