Is Honda-Nissan merger a strategic mistake ?
I think so. Because they are trying to solve the issue of speed with scale 🙅♂️
Reason why I totally endorse this viewpoint from a recent article in The Economist
Here’s an excerpt 👇
Honda is merging with Nissan, a floundering domestic rival, to create the world’s third-largest carmaker by sales, behind only Toyota and Volkswagen
Yet joining together will not fix the problems of a duo stuck in the past.
Both firms have struggled with the upheaval in the car industry. Keeping pace with Chinese rivals in their home market and, increasingly, around the world requires rolling out electric vehicles (EVs) and investing heavily in software while continuing to sell the petrol cars that will finance the shift
Nissan in particular is dangerously weak.
Would a deal secure the future of the firms involved, though?
Pooling resources would help. Yet the biggest advantage Chinese firms have is not scale but speed.
New models are developed in three years or fewer, half the time it takes foreign firms. Software is updated in the blink of an eye. No legacy carmaker from Japan, America or Europe has yet worked out how to match the pace at which Chinese carmakers are innovating.
Bringing together two ponderous Japanese giants, whose best years may be behind them, is unlikely to be the answer 🤔
Speed, not scale, is what they require 🚀
What do you think?
