Nissan, Honda explore merger to form auto giant

Nissan Motor Co. is discussing a potential merger with Honda Motor Co. to create the world’s third-largest automaker and improve their chances of survival in facing challenges in the industry.

Highlighting Nissan’s vulnerability, discussions between the two parties seem to have gained momentum after Hon Hai Precision Industry Co.—the Taiwan-based maker of iPhones, widely known as Foxconn—approached Nissan about acquiring a stake, according to a source familiar with the matter. Foxconn has been making significant investments in factories for manufacturing electric vehicles (EVs).

News of the talks sent Nissan’s share price soaring by 24 per cent, its largest single-day gain ever. Conversely, Honda’s stock fell by three per cent, indicating investor concerns about potential integration challenges.

Nissan made headlines in early November 2024 by cutting its profit forecast, announcing 9,000 job cuts globally, and reducing global output by 20 per cent due to declining consumer interest in its lineup.

Attribution: Bloomberg

Subediting: M. S. Salama