The geopolitical realignment in the automotive sector is about to give birth to a new powerful front, but not without dramatic internal upheavals. After the large-scale attempt for a full merger between Honda and Nissan collapsed, the two companies changed strategy and are currently finalizing an alternative partnership. The idea is clear - joining forces against the crushing expansion of Chinese brands. However, the clouds over Tokyo are thickening, as European partner Renault, as a key shareholder in Nissan, has the leverage with which to block the agreement.
The situation in the camp of the Japanese giants is tense to say the least, as time for reaction is running out. Honda has been forced to reconsider its ambitions for the electric vehicle market after serious financial losses exceeding two billion euros in the last fiscal year. At the same time, the situation at Nissan is not rosy - the company is going through a painful restructuring, staff cuts and cost reductions due to serious liquidity problems. Nissan's attempts to seek a lifeline in the face of Toyota have also hit a snag due to strict antitrust laws in Japan.
The new survival plan envisages something extremely practical: sharing technology instead of a corporate merger. Future models from Honda, Nissan, as well as those of its Mitsubishi partners, will share a completely identical software architecture and unified electronic control units (ECUs). These components are the nervous system of the modern car and are critical for autonomous driving and digital connectivity. Engineers plan to use these common platforms in the next generation of vehicles, which should hit the market at the turn of the next decade.
The big question mark over this Asian pact, however, remains Paris. The French company Renault owns 15% of the voting rights in Nissan and signals from Japan indicate that European management views these shuttles with suspicion. Inside sources are already warning that any more serious strategic decision or possible capital alliance between the Japanese brands requires the blessing of the French, who can easily veto it.
Honda's management does not hide that the stakes are huge and the next three years will be decisive for the survival of the traditional passenger car business. The pressure from the new Chinese players is relentless, forcing the recently sworn enemies in the domestic market to seek salvation together, trying to balance the interests of shareholders in Europe with the harsh market reality in Asia.