Global Automotive Industry on the Brink of Major Shift
Foxconn Eyes Stake in Nissan, Threatening Honda Merger Talks
Taiwan’s Foxconn, the manufacturer behind Apple’s iPhones, is in secret talks with Renault, Nissan’s largest shareholder, to acquire a stake in the Japanese automaker. This move could disrupt the potential merger discussions between Nissan and Honda, which would create a formidable rival to Toyota in Japan.
Nissan’s Financial Woes Create Opportunity for Foxconn
Nissan has been struggling, slashing its earnings forecasts and cutting 9,000 jobs globally. Foxconn, which has been investing heavily in electric vehicle production, sees an opportunity to provide a financial rescue to Nissan. However, Nissan has been hesitant to engage with Foxconn, prompting the Taiwanese company to approach Renault instead.
Renault’s Approval Crucial to Any Deal
Renault’s 36% stake in Nissan is a result of a long-standing alliance between the French automaker, Nissan, and Mitsubishi Motors. Renault’s approval will be essential to any deal, and Foxconn’s chief strategy officer, Jun Seki, is currently in talks with Renault in France.
Honda Threatens to End Partnership with Nissan
Meanwhile, Honda has threatened to end its strategic software partnership with Nissan if it pursues a deal with Foxconn. Honda has also offered to act as a white knight investor to protect Nissan from a potential hostile takeover.
Merger Talks Between Honda and Nissan Imminent
Official talks between Honda and Nissan, including the possibility of a merger, are expected to begin as soon as December 23. Honda is considering several options, including a merger, capital tie-up, and the formation of a holding company, which could also include Mitsubishi Motors.
Industry Consolidation Inevitable
The potential merger between Honda and Nissan would create a strong competitor to Toyota in Japan and allow the companies to pool resources to compete with global players like Tesla and BYD. According to Subaru Corp. CEO Atsushi Osaki, consolidation is necessary for carmakers to overcome the challenges of the rapidly changing industry.
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