The Honda & Nissan Merger
There was a lot of talk recently about Honda and Nissan’s announcement to merge and create the world’s third-largest automaker.
Their aim is to tackle the growing dominance of popular domestic EV brands and hybrids like BYD and Dongfeng in China. It’s pretty obvious why. Nissan experienced a 14.3% drop in China sales in the first half of its fiscal year. It reported a $61 million loss in the third quarter and announced that it was laying off 9,000 people and reducing its global production capacity by a fifth. Honda still made a net profit of $3.25 billion in the first half of its current fiscal year but that is a 20% decline from the previous year. Its China sales fell 29% in its July to September quarter.
At first glance, their plan to join forces and compete more effectively together against Chinese automakers - whose global market share is expected to grow from 21% to 33% by 2030 - absolutely makes sense.
But I also can’t help but wonder if they are each other’s best possible partners.
I truly believe that the most enriching and efficient partnerships are between those organizations that have very distinct cultures and stand to learn a lot from each other’s differences. I have noticed this myself, when my company CARYA made acquisitions in The Netherlands, Switzerland and France. Over the past 4 years, I noticed the tremendous potential from the cross-pollination between the contrasting cultures and approaches of our separate branches.
Honda and Nissan are both international legacy Japanese car brands. Even if there are differences between them - for instance, in terms of pricing or EV adoption - I also fear they may be too alike to fire up the interesting collusions and innovation mindset needed to address the fast growth of Chinese brands. I feel that the type of varied collaborations like that of Geely purchasing Volvo Cars from Ford Motor Company is a lot more interesting. Or imagine the sparks that could fly from a merger or acquisition between Porsche and Cadillac?
Time will tell how this will evolve. I, for one, am very curious to see what will happen.
At first glance, their plan to join forces and compete more effectively together against Chinese automakers - whose global market share is expected to grow from 21% to 33% by 2030 - absolutely makes sense.
But I also can’t help but wonder if they are each other’s best possible partners.
I truly believe that the most enriching and efficient partnerships are between those organizations that have very distinct cultures and stand to learn a lot from each other’s differences. I have noticed this myself, when my company CARYA made acquisitions in The Netherlands, Switzerland and France. Over the past 4 years, I noticed the tremendous potential from the cross-pollination between the contrasting cultures and approaches of our separate branches.
Honda and Nissan are both international legacy Japanese car brands. Even if there are differences between them - for instance, in terms of pricing or EV adoption - I also fear they may be too alike to fire up the interesting collusions and innovation mindset needed to address the fast growth of Chinese brands. I feel that the type of varied collaborations like that of Geely purchasing Volvo Cars from Ford Motor Company is a lot more interesting. Or imagine the sparks that could fly from a merger or acquisition between Porsche and Cadillac?
Time will tell how this will evolve. I, for one, am very curious to see what will happen.
