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Honda and Nissan Merger Collapses: Hyundai’s Position Secured, Focus Now on Electric Vehicles

Daniel Kim Views  

(left) Honda, (right) Nissan
(left) Honda, (right) Nissan

The much-discussed merger between Honda and Nissan has effectively collapsed, allowing Hyundai Motor Group, ranked third in the world, to breathe a sigh of relief. This development eases one less worry for Hyundai Motor Group, which has struggled this year with the onslaught of Chinese electric cars and the quickly shifting US market.

Despite this positive news, Hyundai Motor Group plans to enhance its eco-friendly and global competitiveness this year by strengthening its hybrid and electric vehicle lineup, increasing overseas sales, and localizing battery production.

According to the automotive industry, on Monday, analysts suggested that the merger between Japanese automotive companies Honda and Nissan is likely to fall through as it has been temporarily suspended.

This situation arose because Honda proposed converting Nissan into a subsidiary. Given the current standings of both companies, it wouldn’t be unreasonable for Nissan to become a subsidiary of Honda. However, some critics argue that this would significantly harm Nissan’s pride, which once dominated the market. Accordingly, both companies will soon hold board meetings to discuss suspending management integration negotiations.

Nissan stated that although no final decision has been made, one option under discussion is terminating the agreement with Honda regarding the merger.

With the merger between the two companies off the table, Hyundai Motor Group can maintain its position as the third-largest automaker in the world. Last year, Hyundai Motor Group recorded global sales of 7.231 million vehicles, securing its third-place position behind Toyota and the Volkswagen Group.

In contrast, if Honda and Nissan had successfully merged, they could have threatened Hyundai Motor Group’s position with combined sales of 7.35 million units last year.

Moreover, both Honda and Nissan possess advanced hybrid and electric vehicle technology, raising concerns that collaborating on new car development could allow them to capture Hyundai Motor Group’s customers. Thus, the collapse of their merger is welcome news for Hyundai Motor Group.

Hyundai Ioniq 9
Hyundai Ioniq 9

South Korea’s auto industry also evaluates this as “good news for Hyundai Motors.” However, despite this good news, Hyundai Motor Group plans to increase its global competitiveness this year by strengthening its hybrid and electric vehicle lineup, increasing overseas sales, and internalizing batteries.

Hyundai Motor Group plans to introduce various eco-friendly new models this year. A large electric SUV targeting the US market will launch this month, and the Kia EV3 and EV4 are also scheduled for release to respond to China’s BYD’s low-price offensive.

Additionally, they plan to produce the Palisade hybrid model soon to establish a full lineup of HEVs and provide diverse choices to global consumers.

Furthermore, in March, they will open a “next-generation battery research facility” at the Uiwang Research Center in Gyeonggi Province and plan to operate a “pilot line for solid-state batteries.” Solid-state batteries, often called the’ dream battery,’ reduce fire risks while enhancing performance.

Through these initiatives, Hyundai Motor Group aims to complete its ‘battery internalization’ strategy and maximize its electric vehicles’ technological and price competitiveness.

An industry insider remarked that with the potential collapse of tnoted that if the merger were to collapseion as the third-largest global automaker while also defending its leadership in hybrid and electric vehicles.

Daniel Kim
content@viewusglobal.com

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