After announcing its plan to merge with Nissan, Honda has one request of its soon-to-be-partner: buy back your shares from Renault.
Sniffed out by Bloomberg News from a Kyodo News report, Honda isn’t keen on any merger where there could be “undesirable foreign influence.” Honda is concerned that Renault’s 35.7 percent stake in Nissan could be snapped up by a third party while merger negotiations are underway.
Nissan and Renault have an alliance dating back to 1999 that Mitsubishi Motors joined in 2016.
Leading up to that shock announcement in December, rumors circulated that Foxconn or even a Chinese automotive brand was interested in a partial or complete takeover of Nissan to either utilize the carmaker’s manufacturing capacity or skirt trade tariffs.
The big question now is whether Nissan would have the funds to buy out Renault’s stake. The Renault stake is rough around 557 billion yen (USD 3.6 billion). This is compared to Nissan’s remaining cash and cash equivalents which were pegged at 1.56 trillion yen (USD 10 billion).
What makes matters worse is that Nissan’s forecasting their operating income to plunge to just 150 billion yen (USD 965 million)—70 percent down from the previous forecast. They’ve also lowered their revenue outlook by more than 9 percent resulting in virtually no growth for the year.
In all honesty, the only solution to Honda, Nissan and Mitsubishi having such problems would be three of them to join with Toyota instead, just like how it did with Daihatsu, Subaru, Mazda, Suzuki and Isuzu.
ReplyDeleteJapanese government won't allow that due to anti-trust and anti-monopoly laws
DeleteToyota already got lots of problems when it comes to quality of its vehicles
Toyota only got small shares at Mazda,Subaru,Isuzu and Suzuki but they still don't own those car companies
Sell the remaining shares of Renault to Dongfeng
ReplyDeleteDongfeng is the partner of Nissan and Honda Cars in China
Nissan is gonna ran out of cash if they buy back from Renault
Renault already has a partnership with Geely, owner of Volvo and shareholder of Mercedes-Benz.
DeleteAccording to carlos ghosn himself- this mergers with honda mitsu and nissan will not work bcoz of corporate pride. Its a clash of corporate identity, prowess and engg pride.
ReplyDeleteHe’s seen it firsthand. That’s the very reason why the planned Nissan-Renault merger fell apart with his arrest.
DeleteWell, that was quick. Goodbye Nissan. Renault could very well spite Nissan for being such an undesirable partner. The fact that the merger hinges on Renault’s imprimatur doesn’t bode well. Nissan would likely have to shell out a major premium in exchange for Renault’s stake, Nissan is cash strapped right now. Japan Inc. would likely need to bail out Nissan with cold, hard cash for the merger to continue.
ReplyDeleteMeanwhile to South Korea, Hyundai and Kia are already growing fast not since today.
DeleteI think Foxconn is a good partner. Japanese govt think that technology might be lost if Nissan is acquired. But that technology is losing value by the day. The Chinese can build good cars at lower cost than Nissan. They certainly would not be willing to pay much for Nissan. But Foxconn can bring money, new ideas,mentality and culture. They may even have complementary technologies.
ReplyDeleteBut since most countries in the world have already committed to consider the PRC as the only form of China, then with Foxconn being of Taiwanese origin means it would be more of a blow given that deals with Taiwan jeopardizes efforts to do business with China due to the one-China policy.
DeleteFoxconn is Taiwanese similar to Nissan Taiwan and Nissan Philippines's shareholder Yulon Motors
DeleteAFAIK Nissan Taiwan stopped developing unique Nissan vehicles for its homemarket
Malakas Naman Ramen Division ng Nissan,oops Nissin pala yun
ReplyDeleteWhen Toshihiro Mibe, the CEO of Honda, was asked recently what the strategic benefits of the new partnership were, Mibe-san replied, “That’s a difficult one.”
ReplyDeleteHaving Foxconn as a major shareholder does not make Nissan products subject to tariff regulations restricting either country. Nissan cars made in Thailand would still be a car with Thai country of origin classification subject to the relevant FTAs. The downside of Foxconn is it will not follow established Japanese corporate customs and any automotive technology they bring is not yet tested.
ReplyDeleteAfter all, Foxconn and Nissan are Asian companies, so this may suggest that there might be something in common with the aforementioned corporations, but on other hand, another big nightmare could be South Korea's Hyundai being one of Nissan's shareholders.
DeleteIts final- if these merger does not work- the government will take over nissan.
ReplyDeleteJust bcoz nissan carries the japan name (nissan means made in japan)
I don't know if there are any other made in Japan Nissan sold in the country aside from the LEAF, GT-R, and Z.
DeleteOur Leaf is actually not sourced from Japan, but the UK. Weird, right? But yes, the rest that you mentioned--GT-R, Z, as well as the Urvan and Patrol are sourced from Japan.
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