Nissan Motor is considering replacing CEO Makoto Uchida following disappointing earnings and failed merger talks with Honda. According to Bloomberg News, Nissan directors are privately exploring potential successors. Uchida has been with Nissan for 22 years, serving as CEO since 2019.
Why did Nissan-Honda merge collapse?
A potential $60 billion merger between Honda and Nissan could reshape the electric and hybrid vehicle market. If the merger had gone through, the combined company would rank as the fourth-largest automaker globally, behind Toyota, Volkswagen, and Hyundai.
A Financial Times report suggested that Honda is open to resuming merger talks with Nissan on one condition, the current Nissan CEO must resign. Why is Uchida the stumbling block in this deal? Based on a Reuters report, Honda wanted Nissan to be a fully owned subsidiary, this offer was rejected by Uchida.
Following the collapse of the merger talks, Nissan’s chances for a revival appear grim, particularly after the company slashed its profit forecast by 70%. In addition, Nissan plans to reduce its global workforce by 9,000 jobs and cut its production capacity by 20%.
Earlier, The Financial Times reported that Renault, a Nissan partner, also expressed disappointment at the failed merger talks.
Honda may shift out of Mexico and Canada
Many automobile companies are considering shifting their manufacturing plants from Mexico to the U.S. and Honda is no different. At a recent analyst call, Global EVP Shinji Aoyama admitted that the Japanese company may look at expanding its U.S. operations while shifting out of Mexico and Canada. General Motors and Nissan have also voiced similar intentions. Honda manufactures around 200,000 vehicles in Mexico out of which 80% are sold in the U.S. Honda has committed a $1 billion investment in three plants in Ohio, US, where it will produce both internal combustion engine vehicles and all-electric.
