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Report: Forget Honda, Nissan May Partner with Foxconn
Don’t underestimate the pride of an ailing company. After signing a memorandum of understanding in late December to “consider” a merger with Honda, a source told Reuters that Nissan is backing out of the discussion. Why? Honda suggested that Nissan become its subsidiary.
In a sense, Honda said the quiet part out loud. Honda is the second-largest automaker in Japan, behind big-dog Toyota but far ahead of third-ranked Nissan, which has had a rough go of things since even before its CEO, Carlos Ghosn, was arrested on charges of financial misconduct in 2018. Combined, Honda and Nissan would become the third-largest automaker in the world. The proposed $58B merger might as well be a takeover, some said; Honda is worth four times as much as Nissan. Who knows whether or not Nissan initially viewed the proposed “business integration” as a takeover, but an outright takeover was too bitter a pill to swallow.
The board’s agreement to reject the deal comes after little more than a month of discussion. All Nissan will say, for now, is that everyone can expect a final decision by mid-February (as told to Fox Business). Honda is expected to announce earnings on Feb. 14, and Nissan the day before. We can be sure this change of direction will be a hot topic among the analyists on both of those calls.
Reuters reports that Nissan is still seeking a partner, and that it would consider Foxconn, which the publication calls “the world’s largest contract electronics maker.” (You probably know Foxconn as the Taiwan company that makes iPhones for Apple.)
Foxconn has wanted to get into the business of electric vehicle production for a while. It has ambitions to enter the U.S. market in 2025 with the Model C, designed “in cooperation with American partners” by Foxconn’s automotive subsidiary Foxtron, a joint venture with Taiwanese automaker Yulon Motor. Foxconn has a plant here, too: In 2022 it purchased what was Lordstown’s EV plant in Ohio. In 2023 it even hired an executive who had spent over 30 years with Nissan—Jun Seki, who had risen to the third-highest role in the company in the aftermath of Ghosn’s arrest—to be its chief strategy officer for electric vehicles.
Foxconn has already approached Nissan, wanting to purchase a controlling stake in the automaker, say Reuters’ sources—but Nissan said no. Perhaps, now that Honda put its cards on the table, Nissan is reconsidering Foxconn’s offer. Given the momentum Foxconn has already built, it’s not at all hard to imagine that the contractor sees the ailing Japanese brand as its gateway to the U.S. EV market. Nissan, on the other hand, may soon have to decide between bankruptcy and assimilation.
Pay attention here. This may be the future.
Automakers have been looking to off load their production plants and just be the design and engineering firm.
They want to build cars like Apple Builds electronics. They design and engineer the product then send it to Foxconn or another assembly company to build the product.
MFG is a major expense due to the unions and they would like to just focus on product and let someone else deal with the labor.
The old Doodle bug business model.
(US company sold the rights in Canada to make them for the cost of one unit).
Okay, so maybe not quite. hyperV6’s comment is interesting for sure.
Fits in with the GM will become google motors talk we have heard for years now (insert any big tech money player).
A lot of this is more aimed at EV cars. We may not see all cars built this way but I expect some EV cars will be.
The cold hard truth is EV is here to stay the rate of market share will be variable due to elections.
EV’s are definitely going to stay in Europe… Except for Tesla.
As long as the ICE companies and their oil industry friends continue to manufacture vehicles with unacceptable fuel mileage/fuel consumption numbers, like the 12.5 mpg (U.S.), 2025 Corvette, the future of EV’s and Hybrids is assured.
Ever driven a Corvette?
I doubt he has
Unless EVs achieve massive improvements in purchase price, range, and charging time, along with a huge increase in the availability of charging stations, most people will simply not buy them unless their government forces them to. That’s all there is to it.
I agree. Nothing against the Corvette as it is a performance car not really an everyday driver but my 2002 Saturn gets 40 mpg and has taken me everywhere I have wanted to go for the last 200k miles. 23 years later GM should have cars that get way better than that.
Nissan does not look like it is in a good place, so I am curious what they were expecting from merging with a bigger company. I’m not sure if Foxconn is a good match either as they would likely just want Nissan for the production plants.
Having just bought a Nissan, I hope it gets sorted out soon.