In the business world there are times when historical rivals decide to put aside their differences to confront a common threat. Honda and Nissantwo traditionally feuding auto industry giants, are preparing to begin negotiations on a possible merger.

The information comes to us from Nikkei. The renowned Japanese newspaper points out that the aforementioned manufacturers want to join forces at the highest level to compete under better conditions in the electric vehicle market dominated by Chinese firms and the American manufacturer Tesla.

Honda and Nissan seek to join forces to compete against Tesla and Chinese manufacturers

The first step to materialize the proposed merger will be the signing of a memorandum of understandingaccording to Nikkei sources. The initial statement would come very soon, and would lay the groundwork for Honda and Nissan to begin operating under a single holding company in the near future.

It should be noted that the potential merger deal does not appear to be exclusive to Honda and Nissan. People involved in the matter have said it could also include Mitsubishi Motors, which is one of the 50 largest companies in Japan, and one of the most recognized car manufacturers in the world.

Honda Civil, one of the best-selling cars of all time (left); Tesla Model Y, Tesla’s most popular vehicle (right)

The most recent rapprochement between Honda and Nissan occurred earlier this year, when the manufacturers reached an agreement no specific binding obligations. At that time the scope of the collaboration was not clear, and it was not known exactly in what aspects the companies would work together.

The automotive industry is changing rapidly. And much of this new dynamic is being driven by new players offering electric vehicles. Among them we find the American Tesla, founded in 2003, and the Chinese BYD Auto, a subsidiary of the Chinese firm BYD Company that appeared on the scene the same year.

a report from the International Energy Agency (IEA) offers a detailed x-ray of the industry: 18% of cars sold in 2023 were electric. This is equivalent to 14 million units, of which the vast majority (95%) were manufactured in China, Europe and the United States. As we can see, Japanese cars do not lead this segment.

Images | Aaron Mridha | Nicolás Gutiérrez Cervetto

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