A tie-up between Honda and Nissan will not fix their problems
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Subscribe to enjoy similar stories. Honda put nostalgia to the fore on December 18th when it announced that the Prelude, a nameplate last produced some 25 years ago, now being relaunched as a hybrid-electric, would come with the option of a system that simulates gear changes and combustion-engine noises. The message, however, was quickly drowned out by news with far more bearing on the Japanese carmaker’s future.
It is considering merging with Nissan, a floundering domestic rival, to create the world’s third-largest carmaker by sales, behind only Toyota and Volkswagen. Yet joining together will not fix the problems of a duo stuck in the past. Both firms have struggled with the upheaval in the car industry.
Keeping pace with Chinese rivals in their home market and, increasingly, around the world requires rolling out electric vehicles (EVs) and investing heavily in software while continuing to sell the petrol cars that will finance the shift. Donald Trump’s threats to levy tariffs when he re-enters the White House, and the possibility of retaliation, has added uncertainty. Honda and Nissan seem to have concluded that a partnership to develop EVs unveiled in March will not be enough.
Nissan in particular is dangerously weak. Operating profit plunged almost 90% in the six months to September, compared with a year before. Its market share has dwindled in North America, its most important market, and sales have gone downhill in China.
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