Dec 18 – Nissan Motor Co.’s stock surged by 24 % on Wednesday, Dec 18 following the reports of Honda Nissan’s potential merger. This dramatic rise in Nissan’s stock prices shows the investor’s optimism for the potential collaboration and competitive advantages that such a merger could bring.
In a Tokyo Stock filing, Nissan said it is considering “various ways of future collaboration” with Honda Co. and Mitsubishi as a portion of the strategic collaboration which was reported prior to this year, ” including some matters reported in the press…but nothing has been finalized at this time.”
Honda and Mitsubishi Motors issued a comparable articulation in a regulatory filing, which said that the media reports are not based on any official declarations from the company.
According to Nikkei Asia, which to begin with detailed the merger talks, Honda and Nissan are talking about the plausibility of workingbeneath a single holding company that would permit them to pool their assetsto require on rising rivals.
The report said the size of each of the two automakers’ stakes within the modern holding company and other budgetary points of interest in the merger are yet to be decided.
The company also plans to inevitably bring Mitsubishi Motors – whose best shareholder is Nissan on board, the report included.
The current change point in the automotive sector is being led by electric vehicles, autonomous driving technology, and the entry of new participants. In such a situation, Nissan and Honda suffer from very serious challenges when it comes to managing such a changing competitive landscape not seen before.
Nissan’s Issues: Other than financial issues, Nissan sales also declined recently. The company had not gained recovery from the Carlos Ghosn scandal when these recent declines occurred, along with falling behind technology progress, that electric cars encountered.
Honda Strengths: Honda, on the other hand, is very strong in the areas of engineering and innovation, especially in hybrid and electric vehicles. It has also successfully expanded its global reach and established a good brand image.
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