Some big pre-Christmas news out of Japan made the rounds this week, as reports emerged that Nissan and Honda are planning to sit down for talks regarding a partnership, including a possible merger.
We know that Nissan is experiencing major financial problems, to the point where it would have 12 to 14 months to turn its situation around. As for Honda, things are looking up, but the company remains a smaller player, lagging behind in some segments and simply not present in others.
Japanese daily Nikkei was the first to report that the two companies are about to enter into merger negotiations. Such a deal would create one of the world's largest automakers, behind only Toyota and Volkswagen.
Looking at the portfolio of the two manufacturers, this becomes an intriguing possibility. First, there's the possibility of sharing hybrid and electric technologies. Honda possesses considerable hybrid tech knowledge, but Nissan doesn’t; conversely, Nissan is farther advanced regarding all-electric systems.
Recall that the Honda Prologue electric SUV borrows General Motors technology. Honda is working on its own electric technologies, but it's behind the curve. Nissan already offers all-electric models with the Ariya SUV and LEAF sedan.
Nissan has also already said it plans to produce a hybrid-powertrain Rogue. Honda's experience in the field would be a great help. And this kind of partnership is becoming fashionable. Recall as well that the Mazda CX-50 is now available as a hybrid, thanks to a contribution from partner Toyota.
Clearly, there are potential benefits for both companies.
Each could also fill holes in the other’s product lines. Nissan, for example, has a real mid-size pickup in the Frontier, while Honda's Ridgeline is built on a unibody structure. Honda offers a minivan; Nissan's Quest was discontinued after the 2017 model-year.
Honda still offers sedans, while Nissan has chopped the Maxima and is about to do the same to the Altima. And while Nissan offers a full-size SUV with the Armada, Honda does not.
A merger doesn't automatically mean each company would introduce a copy of the other’s model in those segments, but it does open up possibilities.
And anyways, most importantly, a merger would enable both companies to reduce their development and operating costs.
What about Mitsubishi? What about Renault?
Of course, we mustn't forget Renault and Mitsubishi, Nissan's two partners in the Alliance. According to reports, Mitsubishi would be integrated into any merged entity, but it remains to be seen how. As for Renault's possible role, we’re in the dark, for now.
