Honda's CEO has sparked rumors after making a startling admission about a possible merger with Nissan.
Toshihiro Mebe, 63, who has headed the Japanese auto giant since April 2021, was asked why he thought Nissan would be a good partner.
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“This is difficult,” Honda's boss admitted, referring to the deal, which some critics have slammed as a desperate gamble.
He fails to explain why the merger would be beneficial for both auto giants.
The deal between Japan's two largest automakers, which would create a behemoth that produces 6.5 million cars a year, initially sparked excitement among many.
If completed, the company will become the third largest automaker in the world.
But questions are now being raised about the wisdom of combining financially strong Honda with Nissan, which some have said is in dire straits.
Rumors abound that the potential merger may have an ulterior motive.
Some have speculated that the move was approved by Japan's Ministry of Economy, Trade and Industry as an attempt to prevent a possible purchase of Nissan by Taiwan's Foxconn.
Honda bosses insist the merger is “not a rescue”, while former Nissan bosses have criticized the move.
Carlos Ghosn, former CEO of Nissan, was vocal in his criticism of the merger.
“It means you're putting control above performance,” he said recently.
“Personally, I don't think it will work.”
This merger is not surprising given that both Nissan and Honda are currently working together on in-car technology.
This includes the development of electric vehicles and automotive software.
They also share electric vehicle parts, such as batteries and research software for autonomous driving.
Nissan statement
Nissan shared the following statement with the US Sun about the potential merger with Honda and Mitsubishi:
“The content of reports that Honda, Nissan and Mitsubishi Motors are considering business integration is not based on an announcement from our company,” Nissan spokesman Kyle Bozeman said.
“As announced in March and August, Nissan, Honda and MMC are examining various possibilities for future cooperation including the content of the report, but no decisions have been made.
“If there are any updates, we will inform all stakeholders in a timely manner.”
Both Honda and Nissan are working to integrate artificial intelligence into their cars.
The rumored merger could be completed as soon as next year.
It is also possible that Mitsubishi Motors, a smaller manufacturer that works closely with Nissan, could be involved in the potential merger.
The merger will also unify vehicle platforms across product segments between the two automakers.
This can reduce costs, improve development efficiency, and increase sales.
There will also be a stronger pivot towards autonomous vehicles.
