Honda and Nissan Talk Possible Merger in Difficult Auto Industry

Honda and Nissan are considering a potential merger to gain a foothold in the faltering automobile market, and electric vehicles, in an attempt to deal with struggles in global markets like China.

Honda and Nissan would be discussing a merger that might affect the whole Japanese automobile industry. Both automakers are beleaguered by heavy losses over a couple of years. A merger might help them strengthen in the global automobile market.

The two companies issued a statement early Tuesday regarding the pair's possibility of other future cooperation. However, the date and nature of any possible deal remain vague. The story about the merger that would make this possible was first reported by Nikkei, bringing together two giants of the automobile industry.

This is not the first time the collaboration reached operational levels between the automakers. In March, the two announced plans to work together on electric vehicles and extended to battery technology in August. They, however, have had problems, especially in the Chinese market, where local players have gained a lot of ground, coming in with cheaper and more competitive EVs.

Formerly the leader in the EV field, Nissan has also been bedraggled by the fall from grace of its former CEO Carlos Ghosn. His exit has rather undermined the leadership of Nissan, performance-wise it has been poor, with operating income falling by 90% over one year. It has also not been easy for Honda trying to attain its lofty goal of meeting a zero-emission future by 2040, as it has been sabotaged by a dip in gas prices and minimal charging networks in key markets such as the U.S. and Europe.

It could be a way for both of them to take advantage of this situation in securing future cellular development.