4 days Ago By [email protected] (Graeme Whitfield)
Car making giant Nissan is in talks with fellow Japanese firm Honda over a potential merger, reports suggest. A number of financial media outlets in Japan and elsewhere say that talks on deeper ties between the two automotive giants have been taking place as the companies battle severe pressures in their markets. Nissan earlier this year announced it was looking at 9,000 job cuts in its global operations, though wouldn’t say whether that would affect its Sunderland plant.
The company was later said to be looking for an investment partner after Renault reduced its stake in the firm. Honda and Nissan formed a partnership to co-operate in the development of electric vehicles, with both facing increasing competition from Chinese rivals. In a statement to the BBC , both firms said: “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths.
” Nissan employs around 6,000 people at its Sunderland plant, where it has been pioneering the production of electric vehicles. The firm’s presence supports thousands more jobs in its supply chains, and it has been a key anchor for the North East economy since the 1980s. Challenges for the firm at a global level saw the company announce last month that it would reduce production by 20% and look to cut 9,000 jobs.
The company warned not long after that investment into its UK operations was being put at risk by rules on electric vehicle sales, prompting the Government to announce a review its Zero Emissions Vehicles Mandate. Reports from Japan have quoted a senior executive at Nissan saying the company had “12-14 months to survive” though it is not widely thought that the company’s future is in immediate doubt. Chancellor Rachel Reeves, on a visit to Sunderland, earlier this month, said the Government was in talks with the company in a bid to protect jobs.
The challenges in the automotive sector are not confined to Nissan, with Ford recently announcing 4,000 job losses in Europe and Vauxhall owner Stellantis saying it will close its plant in Luton, putting around 1,100 jobs at risk. Nissan recently released financial results for the first half of 2024 which showed how the automotive giant’s operating profit had plummeted by £1.59bn to just £172m.
It said sales had fallen to 1.6m units, with profitability hit by higher costs in manufacturing and other parts of the business, particularly in the US..
