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Honda and Nissan in Merger Talks Amid Industry Challenges

Allegedly, Honda and Nissan are at present discussing deepening their joint venture to talk of a possible merger. This is taking place when the once very lucrative auto industry in Japan experiences great competition from Tesla and other Chinese manufacturers such as BYD.

It would be the third biggest in the world by vehicle sales after Toyota and Volkswagen, as a merger would form a $54 billion company. The two companies already have a strategic partnership in the development of electric vehicles, but with the financial woes faced by Nissan, the time pressure on these talks might have grown.

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Recently, Nissan announced a $2.6-billion cost-saving program, affecting as many as 9,000 jobs, and a reduction in global production capacity by 20 percent. Such dire circumstances notwithstanding, the prospective merger would provide better competition powers for both companies in a fast-changing automotive industry.

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