Some alliances just aren't meant to be.
Automotive giants coming together to create new platforms, technologies, and vehicles isn't a new concept. In a testing economic climate, it makes even more sense, which explains why Ford and Volkswagen are forging ahead with plans to develop electric vehicles and eight million trucks together.
So, it perhaps didn't come as a complete shock when Japanese officials pushed for a Nissan-Honda alliance this year. Both brands are well-established and compete in a number of the same segments of the market. Could we be seeing a Nissan Altima and Honda Accord sharing parts sometime in the future? Not so fast - both companies rejected the proposed merger, according to a report by the Financial Times.
With even Tokyo's powerful car sector under strain, the idea was suggested by Japanese government figures at the end of 2019 for the first time. The move came based on the fact that the Japanese automotive industry was under pressure from the increasing growth of self-driving electric vehicles. After both Honda and Nissan rejected the idea, Covid-19 arrived and further complicated matters.
Honda is one of the few Japanese brands without an alliance, as Nissan already has a merger with Renault, while other Japanese brands like Mazda and Subaru have links with Toyota. For instance, the Toyota Yaris sold in the US is a rebadged version of the Mazda 2. Another example is the Toyota 86/Subaru BRZ twins.
Honda officials allegedly rejected the merger with Nissan based on the latter's capital structure with Renault, while Nissan would prefer to focus on refining this existing alliance. "A Nissan-Honda merger would only make sense to people who do not understand the car industry," said a former Nissan executive. Recently, we reported on the Renault-Nissan-Mitsubishi merger showing some encouraging signs after earlier troubles when the former Renault-Nissan executive Carlos Ghosn was arrested.
Honda's specific engineering design for its cars would also make it challenging to share parts and platforms with Nissan, and the point would ultimately be to save costs. The merger was said to be doomed before it had even made it to the companies' boards.