Nissan Might Ditch Honda In Favor Of A Tech Company

Partnership talks between Honda and Nissan seem to be breaking down, according to internal sources familiar with the matter. Following the revelation that Honda might want to see Nissan as a subsidiary rather than a partner, the latter automaker is considering tie-ups with other companies, including Foxconn, the Taiwan-based tech company that produces the Apple iPhone. Such a joint venture could help Nissan build a thoroughly modern software-defined vehicle, such as the Kia EV9 electric crossover.

Technology Is A High Priority For Nissan

According to Reuters citing anonymous sources, Nissan CEO Makoto Uchida met with Honda CEO Toshihiro Mibe earlier today to back out of the companies’ proposed partnership. Nissan and Honda initially considered the idea of a merger late last year, but the former’s relationship with Renault seemed to queer the deal a bit. Nissan also owns 24 percent of Mitsubishi, and that automaker was evidently not interested in joining the Honda merger despite CEO Takao Kato appearing onstage with Uchida and Mibe in December to announce the intended merger.

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With its alliance with Honda seemingly over, Nissan is searching for other partners, with a special emphasis on technology companies. The current frontrunner, according to Reuters’ anonymous source, is Foxconn. The electronics manufacturing company previously approached Nissan about a potential partnership and was rejected, but all seems to have been forgiven. Apart from its mass production capabilities, Foxconn also has a fledgling EV research department, so it would benefit from Nissan’s experience in the field, while the automaker might enjoy having dyed-in-the-wool technology experts to rely on as it builds its next generation of EVs and other software-defined vehicles.

Price Cuts, Salary Cuts, And Job Cuts

Nissan and Honda declined to comment on the companies’ closed-doors discussion, underscoring that the details of the merger – including whether it would even happen – will be revealed in the middle of the month. But if the partnership doesn’t come to pass, Nissan will need to undertake some austerity measures to ensure its survival beyond the next year. The automaker has already announced it would cut production and lay off 9,000 workers, and Uchida reportedly slashed his salary in half to try to keep the company afloat.

Nissan is also allowing its dealers to advertise heavy discounts at a level that were formerly forbidden. Even the flawed-but-playful Nissan Z is enjoying bargain-basement prices, a stark about-face from its debut model year that saw dealer markups of $50,000 or more. The company also sells the cheapest new car in America, the Versa sedan, which leans heavily on its low price (and standard automatic emergency braking) to ensure healthy sales. Still, unless Nissan finds a new partner soon, it might have to leave the dance floor for good.

Source: Reuters