Nissan, Honda to explore partnership in electric vehicles

Nissan, Honda to explore partnership in electric vehicles

Japanese auto giants Nissan and Honda agreed to explore a strategic partnership in electric vehicles
Japanese auto giants Nissan and Honda agreed to explore a strategic partnership in electric vehicles. Photo: Philip FONG / AFP
Source: AFP

Japanese auto giants Nissan and Honda said Friday they had agreed to explore a strategic partnership in electric vehicles and other areas.

Analysts said the move was aimed at catching up with Chinese rivals who have stolen a march in EVs while Japanese firms have lost ground by focusing more on hybrid vehicles.

"To further accelerate efforts toward carbon neutrality and zero traffic-accident fatalities, it will be essential to strengthen environmental and electrification technologies as well as software development," a joint statement said.

"The two companies have reached the understanding based on the belief that it is necessary to combine their strengths and explore the possibility of future collaboration," it added.

The scope of the feasibility study includes automotive software platforms, core components related to EVs, and complementary products, they said.

"We are not competing only with the traditional car makers, but also with new players. These emerging brands with innovative products and new business models are making inroads into the auto market and are trying to gain dominance by capitalising on their overwhelming price competitiveness and amazing speed," Nissan chief executive Makoto Uchida told reporters.

Read also

The Gen-Z students at the heart of Vietnam's chip plans

"We cannot win the competition as long as we stick to conventional wisdom and traditional approach," he said.

Honda director Toshihiro Mibe said that there was a "once-in-a-century transformation in the automotive industry".

"Our study criteria will be whether the synergy of the technologies and knowledge that our companies have cultivated will enable us to become industry leaders by creating new value for the automotive industry," he said.

Rising EV sales

Hybrids combine battery power and internal combustion engines and have proven enduringly popular in Japan, accounting for 40 percent of sales in 2022.

But elsewhere Japanese firms' focus on hybrids has meant that they have been left in the slow lane in meeting the growing appetite for purely electric-powered vehicles.

In 2022, just 1.7 percent of cars sold in Japan were electric in 2022, a far cry from around 15 percent in western Europe and 5.3 percent in the United States.

Read also

EU targets TikTok, X, other apps over AI risk to elections

EVs accounted for as much as 20 percent of new cars sold in China in 2022, and the strength of Chinese auto firms helped the country overtake Japan as the world's biggest auto exporter last year.

Honda and Nissan are even considering cutting production capacity in China as sales decline, according to media reports.

"Both of the companies are not at a high-enough scale to create enough profit margins... so they are actually under pressure to find a partnership," said Chris Redl, an auto analyst in Japan.

"Even though they were very fierce rivals historically, it makes more sense for Nissan to get together with a Japanese company like Honda, rather than having these cultural wars with an alliance partner like Renault" of France, he said.

PAY ATTENTION: Сheck out news that is picked exactly for YOU - click on “Recommended for you” and enjoy!

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.