Honda and Nissan plan to merge as Japanese firms seek to fight back against competition from the Chinese car industry. The integration would create one of the world’s biggest car producers alongside Toyota, Volkswagen, General Motors and Ford. The potentially multibillion-dollar deal to combat “the rise of Chinese power” was a key driver behind the plan, said Honda’s chief executive Toshihiro Mibe. Becoming one of the biggest brands in the car industry would allow the firms to claw back space in the growing electric car market, which has been increasingly dominated by Chinese-made electric vehicles, including BYD, which have posed a threat to some of the world’s best known car firms. The rise of Chinese power has left many car makers struggling to compete, as lower labor and manufacturing costs make local firms more nimble and able to price their goods lower than foreign counterparts, making them far more attractive to buyers. It has led to China becoming the world’s biggest producer of electric vehicles.
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