- Honda and Nissan, along with another Japanese auto giant Mitsubishi, have started talks to set up the third largest carmaker group in the world.
Honda Cars and Nissan Motor, two of the big three Japanese carmakers present in India, are all set to join hands to set up the third largest carmaker group in the world. The duo, along with another Japanese auto giant Mitsubishi, have started talks to set up a new holding company, an umbrella under which the trio will manufacture cars for the global markets.
The primary aim of this alliance is to take on the growing challenges from Chinese carmakers, especially in the electric vehicle segment. India will be one of the key markets in focus for the alliance where Honda and Nissan aim to step up their game in coming years.
Honda Cars and Nissan Motor have been present in India for more than two decades. Both carmakers have seen relative success in the Indian market, world’s third largest. However, the duo has not been able to match the success enjoyed by Toyota Motor, the largest Japanese carmaker in India. While Toyota is placed among the top five carmakers in India, Honda and Nissan together control barely two per cent of the market share in terms of sales.
Honda currently sells models like the Amaze and City sedans and the Elevate SUV. Nissan Motor has only one car manufactured in India – the Magnite sub-compact SUV. Nissan also launched the new generation X-Trail SUV earlier this year which is sold through the CBU route.
Also Read : What the Honda-Nissan merger could mean for the global carmakers and the industry
Honda-Nissan merger: Will it go Maruti-Toyota way in India?
Question remains how Honda and Nissan will work out their alliance from an Indian market perspective. None of the carmakers have come up with any official statement on the recent merger or on how the alliance will benefit in India. Previously, Toyota Motor tied up with Maruti Suzuki in a partnership where the duo jointly develop cars for the Indian customers, as well as share models. The formula has benefitted Toyota with nearly half of its sales coming from rebadged Maruti cars.
For Honda and Nissan, a synergy of this sort could not only help them increase sales volume but also open doors for collaboration on new cars in future besides opening opportunities to share platforms, facilities as well as production costs. Puneet Gupta, Director at S&P Global Mobility, India & Asean, said, “Honda Nissan both have been struggling in India and have been slow in launching new models at successive intervals. Both brands have strong brand equity in India market which can help them make a strong comeback if it’s backed by strong product launches at right price and right segments. Considering India is only big market in Asia where Japanese can think of elevating their market share in the world where China-fication is happening quickly.”
A key aspect of the Honda-Nissan partnership announced on Monday (December 23) was collaboration in the electric vehicle segment. EVs or hybrid vehicles are two segments where both have the potential to benefit from each other. While Honda’s expertise lies in hybrid vehicles, Nissan is better placed to share technology in the field of EVs where Honda is a late entrant. Som Kapoor, Partner at Ernst & Young Global Consulting Services, said, “Both Honda and Nissan are Japanese companies, both complement each other. Honda is strong in hybrids, and Nissan is strong in pick-up trucks and EV technology. If the tie-up eventually happens, both only have to gain from each other.”
Honda and Nissan’s India roadmap ahead:
Nissan Motor, already facing major financial crunch, had announced job cuts and reduce production to manage costs in global markets. But the carmaker appeared bullish when it announced its India plans for the future. Frank Torres, President of Nissan India Operations, said, “Nissan is betting big on India…and the plans (for India) remain intact despite this global turbulence.” The carmaker is expected to increase its portfolio by another five models in the next two years. It had earlier showcased the Juke and Ariya EV in India both of which are being tested for their viability for the Indian market.
Honda Cars, which will lead the partnership with Nissan and Mitsubishi, also aim to introduce new models in India by 2027. The carmaker has announced plans to tap growth in the country’s bulging SUV space with new hybrid and electric vehicles, The carmaker had earlier announced it will introduce the fully-electric version of the Elevate SUV by 2026, which will be the first EV from the Japanese carmaker in India.
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First Published Date: 24 Dec 2024, 11:31 AM IST