Japanese carmakers Nissan and Honda on Wednesday confirmed reports that they were discussing “future cooperation”, but denied they had reached any agreement on a merger.
Despite this, Nissan’s share prices rose 22% on rumors of a possible merger. At the same time, Honda declined by 3%.
If the two auto giants merge, it will become the world’s third largest car manufacturing group.
There were also reports that Mitsubishi, one of Japan’s other major automakers, was part of the talks.
The three companies announced in August that they planned to share parts needed to build electric vehicles as carmakers struggle to compete with Chinese EVs.
Both companies are struggling financially
The merger could create a $55 billion giant that would be better able to compete with Japan’s top automaker Toyota and Germany’s Volkswagen, which is also popular in the country.
Nissan already has an alliance with France’s Renault Group, but it is currently under review as the company is facing financial crisis.
Earlier this year it announced it was cutting 9,000 jobs, about 6% of its international workforce, after posting a quarterly loss of 9.3 billion yen ($61 million). CEO Makoto Uchida announced he was taking a 50% pay cut as part of taking responsibility for the issues.
This year, several Nissan executives were arrested for destroying documents related to the case of Renault and Nissan leader Carlos Ghosn, who fled Japan while awaiting trial for fraud.
Honda is also struggling, reporting a 20% decline in profits in the first half of the fiscal year.
es/lo (AP, Reuters)
