Connect with us

World

What a merger between Nissan and Honda means for the automakers and the industry

Published

on

What a merger between Nissan and Honda means for the automakers and the industry

BANGKOK (AP) — Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

The two companies said they had signed a memorandum of understanding on Monday and that smaller Nissan alliance member Mitsubishi Motors also had agreed to join the talks on integrating their businesses. Honda will initially lead the new management, retaining the principles and brands of each company.

Following is a quick look at what a combined Honda and Nissan would mean for the companies, and for the auto industry.

An industry shakeup

The ascent of Chinese automakers is rattling the industry at a time when manufacturers are struggling to shift from fossil fuel-driven vehicles to electrics. Relatively inexpensive EVs from China’s BYD, Great Wall and Nio are eating into the market shares of U.S. and Japanese car companies in China and elsewhere.

Japanese automakers have lagged behind big rivals in EVs and are now trying to cut costs and make up for lost time.

Advertisement

Nissan, Honda and Mitsubishi announced in August that they will share components for electric vehicles like batteries and jointly research software for autonomous driving to adapt better to dramatic changes in the auto industry centered around electrification. A preliminary agreement between Honda, Japan’s second-largest automaker, and Nissan, third largest, was announced in March.

A merger could result in a behemoth worth about $55 billion based on the market capitalization of all three automakers.

Joining forces would help the smaller Japanese automakers add scale to compete with Japan’s market leader Toyota Motor Corp. and with Germany’s Volkswagen AG. Toyota itself has technology partnerships with Japan’s Mazda Motor Corp. and Subaru Corp.

What would Honda need from Nissan?

Nissan has truck-based body-on-frame large SUVs such as the Armada and Infiniti QX80 that Honda doesn’t have, with large towing capacities and good off-road performance, said Sam Fiorani, vice president of AutoForecast Solutions.

Nissan also has years of experience building batteries and electric vehicles, and gas-electric hybird powertrains that could help Honda in developing its own EVs and next generation of hybrids, he said.

Advertisement

“Nissan does have some product segments where Honda doesn’t currently play,” that a merger or partnership could help, said Sam Abuelsamid, a Detroit-area automotive industry analsyt.

While Nissan’s electric Leaf and Ariya haven’t sold well in the U.S., they’re solid vehicles, Fiorani said. “They haven’t been resting on their laurels, and they have been developing this technology,” he said. “They have new products coming that could provide a good platform for Honda for its next generation.”

Why now?

Nissan said last month that it was slashing 9,000 jobs, or about 6% of its global work force, and reducing global production capacity by 20% after reporting a quarterly loss of 9.3 billion yen ($61 million).

Earlier this month it reshuffled its management and its chief executive, Makoto Uchida, took a 50% pay cut to take responsibility for the financial woes, saying Nissan needed to become more efficient and respond better to market tastes, rising costs and other global changes.

Fitch Ratings recently downgraded Nissan’s credit outlook to “negative,” citing worsening profitability, partly due to price cuts in the North American market. But it noted that it has a strong financial structure and solid cash reserves that amounted to 1.44 trillion yen ($9.4 billion).

Advertisement

Nissan’s share price has fallen to the point where it is considered something of a bargain. A report in the Japanese financial magazine Diamond said talks with Honda gained urgency after the Taiwan maker of iPhones Hon Hai Precision Industry Co., better known as Foxconn, began exploring a possible acquisition of Nissan as part of its push into the EV sector.

The company has struggled for years following a scandal that began with the arrest of its former chairman Carlos Ghosn in late 2018 on charges of fraud and misuse of company assets, allegations that he denies. He eventually was released on bail and fled to Lebanon.

Honda reported its profits slipped nearly 20% in the first half of the April-March fiscal year from a year earlier, as sales suffered in China.

More headwinds

Toyota made 11.5 million vehicles in 2023, while Honda rolled out 4 million and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million. Even after a merger Toyota would remain the leading Japanese automaker.

All the global automakers are facing potential shocks if President-elect Donald Trump follows through on threats to raise or impose tariffs on imports of foreign products, even from allies like Japan and neighboring countries like Canada and Mexico. Nissan is among the major car companies that have adjusted their supply chains to include vehicles assembled in Mexico.

Advertisement

Meanwhile, analysts say there is an “affordability shift” taking place across the industry, led by people who feel they cannot afford to pay nearly $50,000 for a new vehicle. In American, a vital market for companies like Nissan, Honda and Toyota, that’s forcing automakers to consider lower pricing, which will eat further into industry profits.

____

AP Auto Writer Tom Krisher contributed to this report from Detroit.

Advertisement

World

Trump Says He Thinks He Will Remove Syria From US Terrorism Sponsor List

Published

on

Trump Says He Thinks He Will Remove Syria From US Terrorism Sponsor List
ANKARA, TURKEY, ⁠July ⁠8 (Reuters) – U.S. ⁠President Donald Trump on Wednesday said he thought ‌he would remove ‌Syria ⁠from ⁠the United States’ list of designated state sponsor of terrorism. “I think I will,” Trump told reporters in response ⁠to ⁠a question ⁠ahead of a meeting with Syrian …
Continue Reading

World

Trump says ‘Iran lies and cheats’ as IRGC emerges as dominant force in negotiations with US

Published

on

Trump says ‘Iran lies and cheats’ as IRGC emerges as dominant force in negotiations with US

NEWYou can now listen to Fox News articles!

As President Donald Trump voiced growing frustration Wednesday with Iranian negotiators, accusing them of lying and cheating, the latest escalation has exposed an even more fundamental problem for Washington: whether the officials at the negotiating table have the power to deliver an agreement — or whether anyone in Tehran does.

Advertisement

“I don’t know if we’re going to have a deal. We may just do it without a deal,” Trump said at the NATO summit in Ankara. “These people, they lie and they cheat.”

But Trump’s frustration with Iran’s negotiators is only part of the problem. Since the death of Ayatollah Ali Khamenei, it has become increasingly unclear who in Tehran has the authority to make — and enforce — an agreement.

TRUMP SAYS IRAN CEASEFIRE IS ‘OVER’ AFTER IRANIAN ATTACKS TRIGGER MASSIVE US RESPONSE

Tehran has deployed a new front on social media including an influence campaign to sway Americans and undermine President Donald Trump’s push for a nuclear deal.  (Hamed Malekpour / Middle East Images / AFP via Getty Images)

Mojtaba Khamenei succeeded his father as supreme leader after the elder Khamenei was killed in the opening U.S.-Israeli attacks on Feb. 28. But Mojtaba has not appeared publicly since the attack, and U.S. assessments cited by Reuters have described authority as dispersed among senior Revolutionary Guard commanders and powerful civilian officials.

Advertisement

Parliament Speaker Mohammad Bagher Ghalibaf, a former IRGC commander who led Iran’s negotiating delegation, has emerged as one of the country’s most powerful surviving political figures.

Banafsheh Zand, an Iranian-American journalist and editor of the Iran So Far Away Substack, said power inside the Islamic Republic has fractured since the death of Ayatollah Ali Khamenei, leaving the Islamic Revolutionary Guard Corps as the country’s dominant force.

“The person who is negotiating with the U.S. is not necessarily someone who is endorsed by the others,” Zand told Fox News Digital.

She described Ghalibaf as one power center competing with figures including IRGC commander-in-chief Ahmad Vahidi, Quds Force commander Esmail Qaani and former Foreign Minister Mohammad Javad Zarif.

Vahidi controls the IRGC’s overall military structure, while Qaani oversees its external operations and relationships with Iran-aligned armed groups across the region. Zarif, by contrast, remains closely identified with the more accommodationist political camp that previously championed negotiations and sanctions relief.

Advertisement

“The hardliners, in terms of their political presence, have also been pushed aside,” Zand said. “So really, it’s the IRGC. And within the IRGC, whoever signs the deal is not necessarily signing on behalf of everybody else. They’re signing on behalf of themselves.”

Her assessment reflects a central problem facing Washington: Iran’s negotiators, political institutions and military commanders may not share the same interpretation of what was agreed — or the same willingness to implement it.

US CLAWS BACK KEY CONCESSION TO IRAN AFTER FRESH ATTACKS ON COMMERCIAL SHIPS IN STRAIT OF HORMUZ

Iran’s Parliament Speaker Mohammad Bagher Qalibaf and Foreign Minister Abbas Araghchi were greeted by Pakistan Foreign Minister Ishaq Dar and Army Chief Field Marshal Gen. Asim Munir upon their arrival at Nur Khan airbase in Rawalpindi, Pakistan, on April 11, 2026. (Pakistan Ministry of Foreign Affairs/AP)

Yet Trump’s declaration does not necessarily mean diplomacy has been permanently abandoned.

Advertisement

Behnam Ben Taleblu, senior director of the Iran program at the Foundation for Defense of Democracies, told Fox News Digital that the clearest evidence would be the restoration of the U.S. blockade, the introduction of additional military forces or a new round of major economic sanctions.

Otherwise, he said, Trump may continue operating in the “gray zone” between negotiations and open war while keeping his options available.

The more difficult question is why Tehran would jeopardize sanctions relief and risk overwhelming American firepower when its military has already been severely degraded.

Ben Taleblu said Iran’s leaders appear to believe escalation is essential to the survival of the Islamic Republic.

“This is a regime that is weaker, but lethal, and less capable, but more confident,” he said. Iran’s leadership believes its adversaries have vulnerable economic and military interests throughout the Gulf, he added, while the regime itself is more willing to accept destruction.

Advertisement

People hold placards with an image of Iran’s new supreme leader Mojtaba Khamenei with late Iranian Supreme Leader Ayatollah Ali Khamenei, during a gathering to support Mojtaba Khamenei, amid the U.S.-Israeli conflict with Iran, in Tehran, Iran, March 9, 2026.  (Majid Asgaripour/WANA (West Asia News Agency) Via Reuters)

“Their survival and their military success and their political success runs through more, not less, escalation,” he said.

Lisa Daftari, foreign policy analyst and the editor-in-chief of The Foreign Desk, agrees the escalation is deliberate, aimed at turning regional instability into leverage.

“By targeting commercial shipping and Arab states, the regime is signaling that it can hold global energy flows and America’s regional partners hostage to extract leverage, distract from its domestic crisis, and test U.S. red lines,” Daftari told Fox News Digital.

She said Tehran is betting that Washington and its Arab partners will be unwilling to sustain another war and will ultimately back down first.

Advertisement

“The regime’s core weapon is time,” Daftari said. “By escalating in the Persian Gulf and attacking ships and Arab states, they are creating rolling crises that raise the cost of confronting them while they consolidate power at home.”

Daftari argued that the strategy reflects the Islamic Republic’s longstanding character rather than a temporary response to pressure.

TRUMP ENTERS FINAL NATO SUMMIT DAY AS UKRAINE, DEFENSE SPENDING TAKE CENTER STAGE

Firefighters work in the aftermath of Iranian drone attacks, at a location given as Bahrain (Reuters)

“This regime was never designed to be reformed or softened,” she said. “What they are showing us now is exactly who they intend to remain: a hardline, revolutionary regime determined to stay in power.”

Advertisement

But determining how that strategy is translated into action is more complicated. Authority in Tehran appears divided, raising questions about who is directing the escalation and whether the officials negotiating with Washington can commit the broader security establishment.

That division is already visible in the dispute over the Strait of Hormuz.

A Middle Eastern source familiar with the issue told Fox News Digital that Tehran and Washington are operating from fundamentally different readings of Clause five of the memorandum. The publicly released text says Iran will use its “best efforts” to arrange safe commercial passage through the strait without charge for 60 days, while removing military and technical obstacles and conducting demining operations. It does not expressly state that foreign vessels must obtain Iran’s approval or use routes designated by Tehran.

According to the source, Iran interprets that language as giving it responsibility — and therefore authority — to coordinate shipping and determine the routes vessels use during the interim period. Washington’s interpretation is that Iran agreed to lift its maritime blockade and fully reopen the international waterway.

When the two sides have different interpretations of a single page, how do they intend to write a treaty, the source said.

Advertisement

Iran views control over passage through the Strait of Hormuz as one of its last major sources of leverage over the United States, Gulf governments and the global economy, the source said, “That is the heart of the matter.”

CLICK HERE TO DOWNLOAD THE FOX NEWS APP

The truck carrying the coffins of the slain Iranian Supreme Leader Ayatollah Ali Khamenei and members of his family makes its way through mourners during the funeral procession toward Azadi Tower in Tehran, Iran, on Monday, July 6, 2026.   (Vahid Salemi/AP)

Taken together, the experts’ assessments suggest Tehran is unlikely to face a simple choice between surrendering to Trump’s pressure and returning to negotiations. Ben Taleblu said the regime believes its survival depends on “more, not less, escalation,” while Daftari said it is deliberately “playing out the clock” by creating repeated regional crises. That raises the prospect that, even if Iranian officials return to the table, the IRGC could continue targeting commercial shipping, U.S. interests and American allies to preserve its leverage and strengthen its position inside Iran.

Advertisement
Continue Reading

World

From sewers to swimming sites: how Europe's cities reclaim their rivers

Published

on

As Europe braces for hotter summers, cities are reopening rivers once written off as polluted waterways. From Paris to Copenhagen, local authorities are investing in cleaner, swimmable rivers to adapt to rising temperatures and meet citizens’ needs.

Continue Reading
Advertisement

Trending