What went wrong at Nissan?

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Losing ground in China

The Honda-Nissan talks are a sign of the “existential threat of Chinese EVs to Japan,” Kantaro Komiya and Yoshifumi Takemoto said at Reuters. Both companies have lost ground in China as BYD and other domestic carmakers capture that rising market. That’s not just bad for Honda and Nissan — it’s a threat to the Japanese car industry, which is “the strongest sector in the world’s fourth-largest economy,” Komiya and Takemoto said. “If the auto industry doesn’t improve, then the whole of Japanese manufacturing will not get better,” said Takumi Tsunoda, an economist at Shinkin Central Bank Research Institute.

The Japanese car industry was once ascendant. Now it appears ready to consolidate in the face of challenges from Chinese EV makers like BYD: Nissan and Honda are in talks for a possible merger.

Keeping pace with Chinese automakers means “rolling out electric vehicles” while also selling the “petrol cars that will finance the shift,” said The Economist. The problem for Nissan: Investors are “unconvinced that it has a clear strategy for EVs or hybrids.” A company containing Honda and Nissan together “could invest more in technology to catch up with rivals,” said The Economist.

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