Merge to survive

Electric mobility is disrupting the global auto industry, forcing alliances and consolidation

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India cannot be immune to the churn in the global auto industry as legacy car makers confront the challenge of new mobility solutions. Alliances and mergers are taking place — Nissan Motor Company along with Mitsubishi Motors signed a memorandum of understanding with Honda Motor Company to begin discussions on a potential merger — as sales of their combustion engine vehicles are sharply falling and they have to navigate the transition to electric vehicles. This year, Nissan expects to sell three million vehicles, sharply down from 4.9 million in 2013. Nissan and Honda’s business integration includes establishing a joint holding company, forming the world’s third largest automaker by sales. It is likely to be operational by August 2026. Both carmakers are already exploring possibilities of collaborating on electrification and software this year. There will definitely be co-investment and co-development of electric vehicles with the merger. Nissan’s current travails include a slump in its value as it has suffered in the US due to a lack of hybrid models,