Nissan’s alliance with Honda shouldn’t be out of the question

Visitors look at a Honda Motor Co's car displayed outside the company showroom in Tokyo April 26, 2013.

A Nissan Motor Co. alliance with Honda Motor Co. “feels a little wrong” but shouldn’t be out of the question if the embattled automaker ends up severing ties with Renault SA, according to LightStream Research analyst Mio Kato.

Such a tie-up could appeal given the threat of Toyota Motor Corp., which has brought many smaller Japanese automakers like Mazda Motor Corp., Suzuki Motor Corp. and Subaru Corp. into its fold, Kato wrote in a note available on SmartKarma.

“Honda has never been one to engage in aggressive M&A and a merger between Honda and Nissan should be unthinkable, but with Toyota’s increasing competitiveness we feel that if Nissan desired an alliance partner to replace Renault, Honda may not be entirely against the idea,” Kato said.

Nissan denied reports earlier this week that it was considering ending its alliance with Renault, which has been shaken by the dramatic escape of former Chairman Carlos Ghosn from trial in Japan. It referred to the Renault alliance as a “source of Nissan’s competitiveness.”

Nissan declined to comment on the report in SmartKarma and referred queries to its previous statements about its alliance with Renault. A Honda spokesman wasn’t immediately able to comment.

Replacing Renault with Honda in the alliance would raise unit volumes to about 12 million units a year from under 11 million units and improve product mix, given that Honda produces larger vehicles than Renault, according to Kato.Kato said carmakers will be inclined to seek partnerships given their investment burden over the new few years. He suggested that the auto industry in Japan could ultimately be split into two giant groups.

Nissan does have attractive possibilities to dangle in front of potential suitors and Toyota’s relentless march forward could necessitate drastic change for those on the outside in Japan,” he wrote.

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.