Japanese govt sought Honda-Nissan merger amid fears of Renault-Nissan-Mitsubishi Alliance collapse

Japanese government figures have apparently sought a merger between Honda and Nissan, fearing that the weakening Renault-Nissan-Mitsubishi Alliance could eventually collapse and leave Nissan in the lurch, the Financial Times reports.

Prime minister Shinzo Abe’s advisers said the relationship between the Alliance brands has reportedly gone “terribly sour” of late, so officials quickly brokered merger discussions at the end of 2019. A tie-up with Honda was suggested, in hopes that it would strengthen the Nissan brand once again.

However, both parties rejected the idea almost instantly, even before the coronavirus pandemic ground things to a halt. Was the merger unappealing? Well, according to Autocar, it’s likely because Honda’s engineering makes it tricky for it to share parts and platforms with Nissan. This means a Nissan-Honda merger would miss out on crucial economies of scale.

Also, Honda and Nissan have very different business models. Nissan, for one, is primarily focused on cars, whereas Honda is more diversified with exploits in motorcycles, power tools, and gardening equipment.

Meanwhile, other big brands have announced merger plans, including that of the PSA Group and Fiat Chrysler Automobiles (FCA). The two entities will enter into a 50:50 merger deal to form the world’s fourth largest automaker called Stellantis (the name will be used exclusively as a corporate brand name).

Also, Ford and Volkswagen have finalised their extensive global alliance, which will see the two work together to develop electric cars, pick-up trucks, vans, and autonomous driving technologies. Both companies expect to produce up to a combined eight million commercial vehicles.

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