New Delhi. Motor company Nissan, which was started in 1914, and Honda, which was formed in 1948, have taken a decision which can change the face of the entire automobile industry. Both of these are Japanese companies and at present both are facing different types of problems. To overcome these problems, both the companies want to unite. The news of the merger of these two companies has been going on for two days. In such a situation, the biggest question before the car drivers is why two such big companies are merging? We are giving you information about this.
Honda and Nissan have announced a major merger by 2025. Both are moving towards forming a common holding company. It is believed that this company will be listed in the stock markets in 2026. If this merger is successful then it will become the third largest automobile company in the world. Only the names of Toyota and Volkswagen will remain on it. Apart from this, the increasing cost of production and tough competition from Chinese companies are the major reasons for this merger.
Dominance of Chinese companies
Due to the popularity of electric and hybrid cars made in China, the craze for cars of Japanese companies has reduced worldwide. Vehicles from Chinese companies such as BYD, Xpeng, and Nio are becoming quite popular. Both Nissan and Honda are losing their market share in China. In such a situation, news has been coming for the past few days that both are considering reducing their production capacity, so that the cost can also be reduced.
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It is heard that both the brands will remain, but the company will become one. In such a situation, the advantage will be that we will be able to share the platform and technology. If capacity in research and development increases, costs will also reduce.
Nissan is currently going through a serious financial crisis. The company had recently announced the reduction of 9,000 jobs (6 percent of its global workforce). Last month the company recorded a loss of 9.3 billion yen (about Rs 450 crore). This merger with Honda can provide stability to Nissan. It is not that only Nissan will benefit. Honda will also benefit from this. Actually, Nissan has a strong hold in the European market, whereas Honda has no presence there. Nissan has body-on-frame technology, and Honda specializes in petrol engines. Similarly, Nissan has long experience in EV (electric vehicles), while Honda is new in this field.
In whose hands will the control remain?
After this merger, the main control will remain in the hands of Honda. He will select the chairman of the holding company. There is also information that Mitsubishi Motors can also be included in it, because Nissan has the largest stake in it. Honda CEO Mibe Toshihiro said that this merger is taking place in view of the changes taking place at the global level.
Honda and Nissan have achieved some success in India, but have had to struggle a lot to maintain the standards. Honda's City sedan made a good place in India, but the company lagged behind in the rest of the segments. Nissan does not have a special identity in the Indian market, but Magnite has registered decent sales so far. If this merger happens then it will be a win-win situation for both.
Tags: auto news, Honda Amaze
FIRST PUBLISHED: December 24, 2024, 13:18 IST