As the two Chinese companies work together to fend off Chinese automakers ‘ competitors, Honda and Nissan have plans to merge.
Joining forces had make one of the world’s biggest vehicle manufacturers alongside Toyota, Volkswagen, General Motors and Ford.
The potential multibillion dollar offer to battle” the rise of Taiwanese power” was a key component of the strategy, according to Honda’s CEO Toshihiro Mibe.
Mr Mibe said a strategy to “fight up” needs to be in position by 2030, or they risk being “beaten” by rivals.
The consolidation, which would include Mitsubishi, of which Nissan is the largest shareholder, would give the three businesses the ability to compete with Tesla and another electric vehicle manufacturers.
Chinese-made electric vehicles, including BYD, have a growing share of the market for electric cars, which has put a risk to some of the best-known auto manufacturers in the world.
At a press conference announcing the merger talks, Mr. Mibe stated to reporters that” there is a surge of Chinese energy and emerging forces, and the construction of the automotive industry is changing.”
Some car manufacturers are finding it difficult to compete because local firms are more flexible and able to price their goods less than foreign competitors, making them much more appealing to buyers.
China has since grown to be the largest manufacturer of electric cars worldwide.
In October, EU officials said the Chinese state was unfairly subsidising its EV makers and announced big taxes on imports of EVs from China to the EU, after the majority of member states backed the plans. The tariffs are set to rise from 10% to 45% for the next five years, but there are concerns it could raise EV prices higher for buyers.
The total sales of Nissan and Honda is more than$ 191bn ( £152bn ), said Nissan’s chief executive, Makoto Uchida.
The two Japanese automakers made a commitment to explore a strategic partnership for electric vehicles ( EVs ) in March.
” The discussions started because we think we must develop skills to combat them, including the current emerging troops, by 2030,” the statement read. Then we will be beaten”, said Mr Mibe.
He added that the agreement was never intended to save Nissan, which has been struggling with declining income.
In November, Nissan said it will cut around 9,000 jobs as it slashes global production to tackle a drop in sales in China and the US. The cuts mean its global production will be reduced by a fifth.
After the imprisonment of longtime chief administrative Carlos Ghosn, Nissan, a once a symbol of Japan’s auto industry, has spent the past few years trying to regain its foundation.
Mr. Ghosn was accused of financial wrongdoing when he fled Japan in 2019 and is currently the subject of an Interpol Red Notice, a request to law enforcement around the world to locate and apprehend a man.
Mr Ghosn, now in Lebanon, told writers in December that Nissan’s consolidation programs were an act of anxiety and anguish.
Mr. Mibe claimed that any consolidation may be reliant on Nissan’s return.
Honda and Nissan made a commitment to work together on capacitors and other technologies in their Automotive firms in March, and in August, they reaffirmed their commitment to cooperate.
But, any agreement is likely to face significant democratic scrutiny in Japan because it could lead to job losses, and Nissan is likely to end its relationship with Renault, a French automaker.