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How Nissan and Honda's $60B merger talks collapsed

reuters.com

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Re: How Nissan and Honda's $60B merger talks collapsed

#21

Post by morkalork »

formerly_proven wrote: post #11
alecco wrote: post #8

Japanese carmakers are going to become irrelevant [1] unless there's a major change. But that's very unlikely due to: 1. Supply chains and key raw materials mostly controlled by China 2. Japan's demographic collapse 3. Japanese Gen Z fed up with an unwinnable rat race where they live to just pay rent and groceries It's very sad. [1] https://carnewschina.com/2025/01/13/byd-surpass-toyota-in-ja...

There's one graph that basically predicts which countries are going to fail and which are going to prevail. It's the graph that shows how many people in the "doing things" age bracket a country has. Compare these: (germany) https://population.un.org/wpp/graphs?loc=276&type=Probabilis... (alternatively, Europe as a whole) https://population.un.org/wpp/graphs?loc=908&type=Probabilis... (Japan) https://population.un.org…

Canada doesn't feel like it's winning despite what the graph says*. Bringing in tons of working-aged immigrants has caused housing (and other living) costs to explode, which in turn has lead to less people having children, which leads to more immigration to fill the gap and the whole thing has been spiraling. Not fun at all.

* https://population.un.org/wpp/graphs?loc=124&type=Probabilis...

Re: How Nissan and Honda's $60B merger talks collapsed

#22

Post by onlypassingthru »

mrguyorama wrote: post #3

This basically means Nissan is dying. It's finances are screwed right now, and this was essentially their last hope. Nissan may not survive the year.

I doubt the Japanese government will let Nissan fold and will instead invest directly, allow Foxconn to take over or some combination thereof. Losing the formerly mighty Nissan would be a big black eye for the government.

Re: How Nissan and Honda's $60B merger talks collapsed

#23

Post by alephnerd »

While this is HN so any automotive conversation inevitabely becomes an ideological war between EV vs ICE fanatics, this didn't play as significant a role in the failure of Nissan and Honda's merger.

As stated in the article - "the merger talks unravelled in a little more than a month due to Nissan's pride and insufficient alarm about its predicament"

More critically, Japanese automakers have always tried to diversify away from Japan as part of the "Flying Geese" paradigm.

For example, Toyota and Honda truly became "American", Mitsubishi truly became "Southeast Asian" (Indonesia, Philippines, Thailand, Vietnam), Isuzu became "Thai", and Suzuki became "Indian".

Nissan on the other hand tried a foreign expansion with the Datsun in the 1960s-80s, but that crashed and burned horribly, and reduced their appetite to expand abroad.

Post-Datsun, most of their international expansion tied their future to Brazil, China, and India as part of the Renault-Nissan partnership under Carlos Ghosn, but that itself came very late (early 2000s) and other players (domestic, international, and Japanese) were well established in those markets already.

Furthermore, Nissan Group's prestige division Nissan Shatai is too entwined politically to Kyushu, which scuttled the merger as Honda would have shut down Nissan's Kyushu factories which represent much of Nissan's capex.

Fundamentally, Nissan's leadership has a low appetite of taking risks abroad after the failure of Datsun, and this would have been toxic for an internationally minded Japanese firm like Honda who has stronger PMF abroad compared to domestically in Japan.

Re: How Nissan and Honda's $60B merger talks collapsed

#24

Post by mperham »

heyjamesknight wrote: post #13
hanszarkov wrote: post #10

Earlier quoted context omitted.

Tesla makes great products.

[flagged]

The quality doesn't matter if consumers aren't willing to step into the showroom. YoY sales are cratering, down 50% (!!!) in Europe. That's catastrophic for a "quality product".

Re: How Nissan and Honda's $60B merger talks collapsed

#25

Post by morkalork »

encom wrote: post #18
mrguyorama wrote: post #3

This basically means Nissan is dying. It's finances are screwed right now, and this was essentially their last hope. Nissan may not survive the year.

As a Leaf owner, that has me worried :/

I don't understand what went wrong here, for a while the Nissan Leaf was _the_ economical all electric sedan. Toyota was and still is dragging their feet on it and Nissan had a lead for years just to blow it?

Re: How Nissan and Honda's $60B merger talks collapsed

#26

Post by jgon »

tahoeskibum wrote: post #6

Nissan, Honda & eventually Toyota are going to go the way of Nokia/Motorola after iPhone came out. Cheap and reliable Chinese EVs will take over the market (like Android), while Tesla will probably maintain a halo premium product like iPhone.

So your prediction is that chinese EVs manage to take over and destroy the Japanese car market, but the American auto market somehow gets a pass and Tesla wins? Why would Tesla be any more able to withstand cars that cost like 1/2 for similar quality, and why wouldn't that same calculus apply to their "halo" products? Are the Chinese fundamentally incapable of building a luxury EV? And if Tesla somehow sees that an EV halo product is their only chance for survival, why wouldn't current halo manufacturers like BMW and Mercedes and Lexus also try for that market, and why are they sure to fail while Tesla succeeds?

And maybe your response to all of the above is that Tesla will not be allowed to fail as part of an industrial strategy on the part of America, in which case the question is why would the other domestic manufacturers like Ford and GM be allowed to fall by the wayside? And further, why would Japan not also embark on a similar strategy and prop up their domestic manufacturers?

Any way you look at it, a prediction that China wins out everywhere except for plucky old Tesla moving into the "Apple" position seems like some sort of bizarre partisanship/home team support that doesn't stand up to a moment of scrutiny.

Re: How Nissan and Honda's $60B merger talks collapsed

#27

Post by petra »

formerly_proven wrote: post #11
alecco wrote: post #8

Japanese carmakers are going to become irrelevant [1] unless there's a major change. But that's very unlikely due to: 1. Supply chains and key raw materials mostly controlled by China 2. Japan's demographic collapse 3. Japanese Gen Z fed up with an unwinnable rat race where they live to just pay rent and groceries It's very sad. [1] https://carnewschina.com/2025/01/13/byd-surpass-toyota-in-ja...

There's one graph that basically predicts which countries are going to fail and which are going to prevail. It's the graph that shows how many people in the "doing things" age bracket a country has. Compare these: (germany) https://population.un.org/wpp/graphs?loc=276&type=Probabilis... (alternatively, Europe as a whole) https://population.un.org/wpp/graphs?loc=908&type=Probabilis... (Japan) https://population.un.org…

Assuming a decent AI and robotics, is a lot of working age population still a good thing? Or just more mouths to feed?

Re: How Nissan and Honda's $60B merger talks collapsed

#28

Post by vardump »

mrguyorama wrote: post #3

This basically means Nissan is dying. It's finances are screwed right now, and this was essentially their last hope. Nissan may not survive the year.

Both are likely dying. Small manufacturers have hard time moving to mass market EV age, even EV pioneering Nissan.

Re: How Nissan and Honda's $60B merger talks collapsed

#29

Post by cayleyh »

morkalork wrote: post #21
formerly_proven wrote: post #11

Earlier quoted context omitted.

There's one graph that basically predicts which countries are going to fail and which are going to prevail. It's the graph that shows how many people in the "doing things" age bracket a country has. Compare these: (germany) https://population.un.org/wpp/graphs?loc=276&type=Probabilis... (alternatively, Europe as a whole) https://population.un.org/wpp/graphs?loc=908&type=Probabilis... (Japan) https://population.un.org…

Canada doesn't feel like it's winning despite what the graph says*. Bringing in tons of working-aged immigrants has caused housing (and other living) costs to explode, which in turn has lead to less people having children, which leads to more immigration to fill the gap and the whole thing has been spiraling. Not fun at all. * https://population.un.org/wpp/graphs?loc=124&type=Probabilis...

The problem with just "living by the graph" is that it ignores whether the country has the capacity to provide basics like food, clothing, shelter, and employment to the population. You need to have both to have the working-age population be able to engage productively in the economy.

The problem Canada created is that it tried to reset it's population graph without ensuring that there was an adequate supply of said basics, and in many instances (housing, food prices) had policies that actively undermined what needed to a happen to support a rapidly expanding population. JT and the other liberal leadership read the Century Initiative and all they took away as "we need 100m people!" (https://en.wikipedia.org/wiki/Century_Initiative)

It's not that a country couldn't theoretically be successful resetting their population graph through immigration, but that they would also have to do things that would cause housing prices to fall or more competition (ie less corporate profits) in the other sectors to absorb the extra demand generated -- 2 things Canada has been absolutely unwilling to do in any meaningful until late last year.

Re: How Nissan and Honda's $60B merger talks collapsed

#30

Post by kenhwang »

morkalork wrote: post #25
encom wrote: post #18

Earlier quoted context omitted.

As a Leaf owner, that has me worried :/

I don't understand what went wrong here, for a while the Nissan Leaf was _the_ economical all electric sedan. Toyota was and still is dragging their feet on it and Nissan had a lead for years just to blow it?

For starters, the Leaf wasn't a sedan, it was a hatchback. In the US market, hatchbacks have always significantly lagged sedans in sales despite being more practical. The regular Prius has evolved to look sleeker and sportier with each generation, but the boxy hatchback Prius V variant was quickly discontinued after introduction due to poor sales.

US consumer preference seems to weigh aesthetic appeal much more than other markets, even at the cost of function. Some other examples are the rugged boxy SUVs that have an aerodynamic/fuel economy penalty compared to their sleek blob counterparts, or the the coupe SUVs that sacrifice both rear headroom and storage capacity for a "sportier" look.

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