The car industry is in for a major shake up. Global sales are down yet many new brands are surfacing, putting pressure on many companies to cut costs to remain competitive yet also be profitable. Not all will manage that successfully, leading to some takeovers or mergers.
Takeovers work better because the absorbed brand has to do what the new owner wants. PSA bought Opel and the transition went well. Mergers or joint ventures are more tricky because who is going to make critical decisions? Renault's alliance with Nissan worked as Renault pulled the strings.
Recently the Renault-Nissan alliance terms were renegotiated to among other things rebalance the partnership, creating greater autonomy for Nissan. Such an arrangement is harder to make work but was agreed to.
How did Mitsubishi get involved in the alliance? In 2016, Nissan took a major stake in Mitsubishi which was embroiled in a scandal. That effectively brought it into the alliance but with little if any say.
Despite the changes, things for the Nissan company were not going well so with profits tumbling, it entered talks with Honda for a merger. Those talks recently broke down when the terms from Honda would make Nissan a subsidiary, seemingly not unlike the former Renault situation. That was rejected by the Nissan CEO.
Now the Nissan CEO has resigned, Honda says it is willing to restart talks. Who knows how they will go but with Honda the more secure company financially, it seems a deal will depend on it having most of the say. Nissan may not want that but it isn't bargaining from a position of strength.
No comments:
Post a Comment