(Reuters) – Japanese carmakers Honda and Nissan are in talks to deepen ties, according to sources, including a possible merger, as challenges from Tesla and Chinese rivals urge a restructuring of Japan’s auto industry.
The two Japanese companies combined would become the world’s third-largest auto group by vehicle sales after Toyota and Volkswagen.
SALES
Honda sold 3.98 million vehicles globally last year, while Nissan sold 3.37 million vehicles on a preliminary basis.
Their combined 2023 sales totalled 7.35 million vehicles, more than the 7.31 million reported by South Korea’s Hyundai and its affiliate Kia, currently the world’s third-largest auto group.
PRODUCTION
Honda produced 4.19 million vehicles globally last year, while Nissan manufactured 3.44 million vehicles.
EMPLOYEES
Honda had 194,993 employees as a consolidated group, while Nissan employed 133,580 as of the end of March, according to securities filings.
MARKET CAPITALISATION
Honda’s market capitalisation is about $44 billion, while Nissan’s is about $10 billion after a share price surge on Wednesday, meaning a full merger would be bigger than the giant $52 billion deal between Fiat Chrysler and PSA in 2021 to create Stellantis.
MAJOR MARKETS
Honda’s most important market is the United States, accounting for a third of its 2023 vehicle sales. Combined with Canada and Mexico, North America represented 37% of sales, while China’s share was 31% and Japan’s was 15%. Europe accounted for only 2% of sales.
Nissan’s biggest market is also North America, accounting for 37% of its vehicles sold in financial year 2023, with the U.S. representing 27%, China at 23%, Japan at 14% and Europe at 10%.
ELECTRIFICATION TARGETS
Honda has a goal of boosting electric vehicle output to more than 2 million units per year by 2030, when the automaker aims to convert 40% of its new car sales to EVs and fuel cell vehicles. By 2040, Honda will sell only EVs and FCVs.
As gasoline-electric hybrid cars have gained popularity in its key North American market, Honda on Wednesday announced an additional 2030 target to sell 1.3 million hybrid vehicles annually, double its 2023 levels.
Nissan, once an EV pioneer that introduced the first mass-market electric car Leaf in 2010, aims for EVs and hybrids to make up 60% of its global sales by 2030, as announced in its latest strategy update issued in March.
($1 = 153.4400 yen)
(Compiled by Kantaro Komiya in Tokyo; Editing by Jamie Freed)