Information about the two Japanese automakers negotiating the merger has created a fever in the car market this week. Accordingly, Nissan and Honda are discussing the establishment of a joint company to share resources in the current competitive context.
According to information from Japan Times, Renault is Nissan's largest shareholder, with 15%. In addition, Foxconn is investing heavily in electric vehicle factories while Nissan needs financial support due to cutting profit forecasts and laying off 9,000 employees globally.
According to Central News Agency, Jun Seki - Chief Strategy Officer of Foxconn's electric vehicle division, informed Nissan about wanting to buy back shares but did not receive any response. Therefore, Seki has begun to approach Renault - a shareholder holding a 15% stake in Nissan.
Seki and his team are negotiating with Renault in France. Renault's stake in Nissan is a legacy of a long-standing alliance between the French carmaker, Nissan and Mitsubishi.
In another development, Honda said it will end strategic software cooperation with Nissan if the company tries to join hands with Foxconn. Honda also offered to protect Nissan as an investor. According to the Honda Executive Vice President, the company is considering options including: merging, cooperating capital and establishing a parent company with Nissan. In particular, the alliance could include Mitsubishi.
This merger between Japanese car brands will create a shield against Toyota Group in the domestic market, allowing Honda and Nissan to share resources to compete with Tesla as well as Chinese car manufacturers such as BYD in the global market.
According to Japan Times, Renault has made moves to prepare for the idea of a merger between Honda and Nissan. The deal's consent will be a key factor in any deal.
