Honda and Nissan are reportedly engaging in discussions about a potential merger, but the talks may not solely aim to fortify their competitive edge in the electric vehicle (EV) market. According to Nikkei Asia, the negotiations are also driven by concerns over a possible takeover of Nissan by Taiwan's Foxconn, formally known as Hon Hai Technology Group.

Foxconn, a global leader in contract manufacturing, has been expanding into the EV sector since 2019. Recently, the company has been eyeing Nissan, leveraging its strategy to secure a 40% share in the global EV market. Foxconn’s chief EV strategist, Jun Seki—formerly an executive at Nissan—has reportedly been instrumental in accelerating these plans.

Sources indicate that Seki’s ambitions include acquiring stakes in Nissan, a move that would grant Foxconn access to Nissan's extensive EV manufacturing expertise and global sales network. Nissan, which pioneered mass-produced EVs with the launch of the Leaf in 2010, is seen as a strategic asset for Foxconn’s aspirations.

Foxconn’s recent maneuvers have prompted Nissan to explore options to maintain independence. Among these measures is intensified collaboration with Honda, another Japanese automaker. Honda has already warned Nissan about potential repercussions if it aligns with Foxconn, with one senior Honda official stating, "If Nissan and Foxconn work together, we will terminate our partnership."

While Honda and Nissan have acknowledged ongoing discussions, neither company has disclosed specific details about the possibility of a merger. Should the merger materialize, it could result in the creation of the world's third-largest automotive group with annual sales exceeding 8 million units. This configuration would enhance their competitive positioning against industry leaders like Tesla and Chinese EV manufacturers.

The backdrop to these developments is Foxconn’s approach to Renault, Nissan's long-time ally. Renault, which reduced its stake in Nissan to 15% in 2023 as part of a restructuring agreement, remains a significant shareholder. Reports suggest that Foxconn may have expressed interest in acquiring portions of the shares currently held by financial institutions, which collectively control 22.8% of Nissan.

Adding to Nissan's challenges, the company is undergoing a major restructuring that includes cutting 9,000 jobs and reducing global production capacity by 20%. These internal vulnerabilities heighten concerns about the potential influence of Foxconn if it gains a foothold in Nissan's operations.

As Honda and Nissan navigate their discussions, the stakes remain high. Their alliance could not only counter Foxconn's ambitions but also redefine the dynamics of the global automotive landscape.

CNNINDONESIA