MotiveAsia

FOCUS: Honda-Nissan merger could zero in on EV development

Kyodo News | English | News | Dec. 20, 2024 | UndeterminedMergers & Acquisitions

Honda Motor Co. and Nissan Motor Co. are in talks to merge under a holding company to enhance their electric vehicle (EV) operations. This collaboration aims to share development costs and utilize common parts, potentially positioning them as the third-largest auto manufacturer globally, following Toyota and Volkswagen. This initiative follows their recent agreement to explore a strategic partnership for EV production to compete with Tesla and BYD.

Both companies are struggling in the Chinese market, with a lack of new EV models and rising costs for advanced technologies. Honda plans to reduce annual production capacity by 290,000 vehicles due to declining sales, while Nissan has already shuttered one local plant. The rapid increase in global EV sales underscores the need for both firms to strengthen their development capabilities.

For Nissan, a merger is crucial, especially after a significant drop in net profit and ongoing restructuring efforts that include job cuts and reduced output. Analysts believe that merging would enable Honda and Nissan to benefit from economies of scale, improving development speed and cutting costs. There is also speculation that Mitsubishi Motors may join this alliance, potentially enhancing synergies. The wider auto industry faces challenges, notably with impending tariff increases on U.S. imports affecting Honda and Nissan's largest market.

Honda-Nissan merger could zero in on EV development

The Mainichi | English | News | Dec. 20, 2024 | UndeterminedMergers & Acquisitions

Nissan and Honda are exploring a potential merger to strengthen their electric vehicle (EV) businesses in the face of growing competition and rising development costs. The proposed partnership would create a holding company, making it the world's third-largest automotive alliance after Toyota and Volkswagen. This initiative follows their March agreement to study the feasibility of collaborative EV production and software technologies to better compete with companies like Tesla and BYD.

As both automakers struggle with declining sales in China due to competition from local affordable EVs, they are initiating significant restructuring. Honda plans to reduce its annual output by 290,000 vehicles, while Nissan has already shuttered one of its local plants. Additionally, rising research and development costs for both EVs and emerging technologies, such as autonomous vehicles, are challenging their market position.

Analysts suggest a merger could enable resource sharing, accelerate EV development, and cut costs. The alliance's potential could grow if Mitsubishi Motors participates. However, uncertainty persists in the auto industry, especially with expected tariff increases in the U.S., presenting ongoing challenges as both companies navigate an evolving landscape.

金興精密擬明年1月中旬上市 攻電動車擴北美市場

Jinxing Precision plans to go public in mid-January next year to expand into the North American market for electric vehicles

Central News Agency | Local Language | News | Dec. 20, 2024 | UndeterminedMergers & Acquisitions

Jinxing Precision, a manufacturer of automotive cooling system fans and air-conditioning blowers, plans to go public in mid-January 2025 to enhance its position in the North American electric vehicle market. The company aims to improve its aftermarket parts services and original equipment services in Thailand, while seeking partnerships for server cooling solutions.

Chairman Shi Chunjing highlighted the firm's commitment to the global automotive aftermarket, particularly in North America. Jinxing integrates production processes like plastic injection and CNC processing. As demand from North American customers grows, it will collaborate with Japanese clients and adapt to the U.S. auto insurance market to strengthen its aftermarket product procurement. Additionally, the company is investing in electronic fan products and automated brushless motor production lines in Thailand to bolster its electric vehicle capabilities.

Approximately 90% of Jinxing Precision's revenue comes from aftermarket parts, with original equipment parts making up 10%. The company offers over 6,000 products, focusing significantly on gasoline-electric hybrids and electric vehicles. In 2023, North America accounted for over 76% of its total revenue. The firm reported a 3.7% year-on-year revenue increase for the first three quarters, totaling NT$838 million, with a gross profit margin of 33.46% and an operating profit rate of 17.81%. Cumulative profit for the period was 125 million yuan, reflecting a 9.5% annual increase.