Honda and Nissan Set Sights on Alliance to Counter Industry Giants

Honda and Nissan are in talks about forming a holding company to compete more effectively against Tesla and Chinese competitors. The proposed reorganization in Japan's auto industry would enable better cooperation on technology. Stock market reactions varied following the news of potential merger talks.

In a strategic move to counter challenges from Tesla and Chinese auto manufacturers, Honda and Nissan are considering establishing a holding company, an insider revealed. This indicates a potential restructuring within Japan's auto industry, emphasizing the need for collaboration in facing fierce market competition.

According to Nikkei newspaper, these talks are aimed at fortifying domestic competition against Toyota, Japan's leading automaker. The discussions involve creating a holding company, possibly paving the way for a more united front between Honda, Nissan, and potentially Mitsubishi Motors, enhancing technological cooperation and market presence.

While news of the talks propelled Nissan's shares by over 21%, Honda's stocks saw a minor dip. The development occurs amid a backdrop of increasing pressure from an EV price war spearheaded by Tesla and BYD. Despite the buzz around a merger, both automakers maintain that no official mergers have been announced yet.

(With inputs from agencies.)