Written by Michael Thervil
In a previous article entitled: “NISSAN ON THE BRINK OF SHUTTING DOWN? MAYBE NOT.” We stated:
“It's safe to have an optimistic view that Nissan has the ability to regain its strength through restructuring in the auto manufacturing market.”
Proving our claim, it was reported yesterday that Nissan will begin negotiating merger talks with fellow Japanese auto manufactures Honda and Mitsubishi and are set to reach a deal by the third quarter of 2026. It's not a matter of if but when this merger deal is created and made official it will make them the third largest auto group in the world. What's holding up the deal is whether Nissan will be able to turn their situation around in time while facing a race against time against Chinese Electric Vehicle (EV) manufacturers.
The truth of the matter is, it’s not that consumers around the world don’t want to buy cars made by Nissan because they do. It's just that Nissan simply failed to both invest and make innovations in the Electric Vehicle (EV) market. The same goes to Honda, as they have made the same mistake as well but not to the extent of Nissan. What makes the Chinese EV market surge is the amount of investment the Chinese government placed into the research and development of their electronic vehicles. So, while China has and still is making tremendous gains as far as technology and software in the EV market, Honda, Nissan, and Mitsubishi have a lot of catching up to do. In essence what we are saying is that they are behind the proverbial 8-ball.
If we were able to give Nissan any words of wisdom, it would be to forget about the American market and focus on the nations that constitute what's known as the developing world. The reason why we are saying this is because by cutting out their reliance on the American auto market, Nissan and Honda will place themselves in a position to circumvent American taxes and tariffs that are sure to come under the Trump Administration. Even more than that, we would also tell Nissan, Honda, and Mitsubishi to find a way to put their heads together on solving issues regarding battery and charging efficiency as well as how to create and streamline the software design for their EV’s.
Can Honda, Nissan, and Mitsubishi, counter Chinese auto manufacturers like BYD? Maybe. But with being behind the times in terms of earning and taking up market share – time is not on their side as for every step they take as a team, the Chinese are sure to take 3 in front of them. In order for them to catch up and be on equal footing with China in terms of the EV market, there will have to be a wild card introduced within the auto market that dynamically levels the playing field. What that wild card is, is anyone's guess.
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