There are rumors afoot that Honda – which is healthy – is considering buying Nissan. Which isn’t. Just a couple of weeks ago, a senior person within Nissan’s hierarchy said the company had “12 or 14 months to survive.” That’s not healthy.
That’s just shy of dead.
Honda is not in that position. So why would Honda put itself in that position – by doing what amounts to chaining itself to a dead man walking?
Honda has been very smart so far in that it has avoided the malinvestment in battery powered devices that has left companies such as Nissan – that didn’t avoid it – with months at most to survive. It currently sells only two devices – and they are Honda-rebadged versions of another company’s devices. The “Honda” Prologue (and its Acura-badged stablemate) being in fact Chevrolet devices that General Motors mailinvested in. This means Honda won’t lose nearly as much money on the other-brand-devices it is reselling under its own brand (and for compliance reasons only). GM spent the money designing and proofing out the device that Honda tweaked a little bit cosmetically. The expensive stuff was paid for by GM.
Nissan has destroyed its brand in part by malinvesting in devices such as the Leaf and the Ariya – including the money wasted on the checks sent to the actress Brie Larsen to try to sex up these devices.
It hasn’t worked.
Just as it hasn’t worked for any car company that thought it was a good idea to stop making cars and switch over to peddling devices. The ones that did are all in trouble – even VW, which was once one of the most successful brands around. It is teetering on the precipice of bankruptcy and dissolution.
Nissan also gave up on the Maxima – and soon, the Altima. On cars, as a class. Instead, it became a crossover brand, just the same as pretty much everyone else. Trying to sell the same thing as everyone else is often a hard sell. Especially when the things you’re selling are generally regarded as being not as well-made as the same things sold by others.
Nissan also turned the compact-sized Frontier it used to sell in huge numbers – because the little truck was cheap and rugged and so exactly what lots of people wanted in a truck – into a big, expensive truck that lots of people don’t want or can’t afford, which ends up amounting to the same thing.
The brand’s Infiniti division is as dead in the water as Titanic was after she hit the berg. We all know what happened soon thereafter.
So – again – what’s in it for Honda?
There’s not much to scavenge – as was also the case after the Dodge, Chrysler, Jeep and Ram truck brands were acquired from Daimler (parent company of Mercedes-Benz) for pennies on the dollar by Cerberus back in 2007. Remember that? Everything worth anything had already been exploited by Daimler prior to the sell-off like a $20-per-hour Vegas escort – and the sloppy thirty-thirds kicked to the curb afterward. Dodge and Chrysler did surprisingly well in spite of that by leveraging the platform – or underlying architecture – of the Mercedes E-Class sedan they were left with to create the very successful Charger and Challenger that had a production run of more than 15 years. Of course, that’s all over now – and probably for Dodge and Chrysler, too.
So what’s to be gained here?
According to the summary blurb that precedes a CNBC article published the other day, “Top Japanese carmakers Nissan Motor and Honda Motor are understood to be exploring a blockbuster merger, as the two rival companies seek to stay competitive on the road to full electrification.”
Italics added.
What do they think think lies down “the road to full electrification”? Has Honda’s management lost its ever-loving mind? The company has so far steered clear of “the road to full electrification.” Why would its management now decide the time has come to steer onto it?
Well, because China is why.
The car business is a global business and China is a much bigger market than the North American and European markets – both of which are in decline due to an aging and impoverished population that increasingly cannot afford new vehicles. But China is bursting at the seams with young people and in China, there is a huge market for battery-powered devices because the Chinese government allows the sale of inexpensive battery powered devices that cannot legally be sold in North America or Europe – irrespective of the “threat” of the “climate” that we are told is “changing.”
“The prospective tie-up could create the world’s third-largest auto group by vehicle sales, with 8 million sales annually, according to Citi. That would place Nissan-Honda-Mitsubishi behind fellow Japanese automaker Toyota Motor and Germany’s crisis-stricken Volkswagen, respectively.”
Italics added.
Does anyone ask why VW is “crisis stricken?” Could it be – assume the voice of the Church Lady from Saturday Night Live’s better days – on account of VW’s decision (made under duress, granted) to take “the road to full electrification”?
And now Honda seems to be wanting to ride shotgun with Nissan and head down that same road.
The acrid electric smell of death is in the air.
. . .
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I’ve long suspected that Nissan gave Disney a bunch of money to push “The Marvels” out the door in order to make Brie relevant again.
Disney would have been better off shelving the movie and eating the writeoff.
As Warren Buffet stated, “When the tide goes out, you see who is swimming naked”.
With new vehicle sales dropping it’s completely predictable some manufacturers were going to be in trouble. Stellantis is reaping what they had sown by overpricing unreliable, low quality vehicles. Nissan certainly is paying the price for the EV tide going out, but their CVTs, many now paired with Turbos, are atrociously bad and that is embedded in the minds of savvy vehicle buyers; much the same as Hyundai/KIA can not build a quality engine.
I think there will be some other consolidations and possibly liquidations if the economy hits the iceberg dead ahead.
‘According to the summary blurb that precedes a CNBC article … the two rival companies seek to stay competitive on the road to full electrification.’ — eric
This summary blurb exemplifies an exasperating practice of the Lügenpresse, in which headline and blurb writers often append a completely different spin than the copy submitted by the reporter, which says nothing about ‘the road to full electrification.’
In this case, I infer that the reporter is London-based. But some 80 IQ headline writer in Englewood Cliffs, NJ thought ‘the road to full electrification’ would play well with CNBC’s Americlown readers.
If appointed as executive director of DHS’s Disinformation Governance Board formerly headed by Nina Jankowicz, I will put CNBC on the road to full electrocution. BZZZTTTT!!!!
Nissan should buy Honda.
That way, Nissan would make some money.
It’s only money until you don’t have any.
Nissan shares are up more than a dollar. So, what now?
Has Honda been buying Nissan shares at five dollars, as many as they can? You will own the factories, not that bad of a deal.
Shoot yourself in the foot and build electric vehicles. Doesn’t work out like you would hope, but what they hey?
Another great day in America, beer drinking all day long on a Saturday is the norm. One of the rules!
Laws? What laws? We don’t need no steeen-king laws.
Rules based order? We don’t need no steeen-king rules based order!
There ain’t no rules based order, just a few wars of which we don’t need anywhere.
That is all.
Regarding the Nissan/ Honda merger; what are the odds that government money is involved? Perhaps if they stuck to selling the products that sell best in a certain region that would make more financial sense. In other words EVs in China and gas or diesel elsewhere. That way they can debug them in a market that wants them and if a market is forced upon them elsewhere they would have products that are ready to go.
[I]n China, there is a huge market for battery-powered devices because the Chinese government allows the sale of inexpensive battery powered devices that cannot legally be sold in North America or Europe
I doubt the reason these EVs are selling in China is that they’re inexpensive, more likely it’s due to Chicom “nudging”. EVs make as little sense in China as they do in any other part of the world, and I’m sure Chinese consumers would much rather have bought a German brand ICE-powered car if they had only been allowed to do so.
Sixty percent of China’s power generation comes from coal-fired plants.
Coal-fired EeeVees — what a concept! :-0
I thought I saw a news item recently that speculated Honda and Toyota were going to merge. Now that would be a powerhouse of a company but Govco would probably try to block it to protect Government Motors.
Could be that Nissan decided it was better to sell off at a dollar than be liquidated at twenty five cents? Not sure what Honda’s motivation is, nor what the motivation is for most auto makers.
The EV market no longer exists. It never really did, without massive government intervention. Which never works out well.
The ChiComs will use every angle to protect their own EV manufacturers. Honda/Nissan may get a toehold on the mainland but that’ll be about it. With respect to EVs tho, I’m assuming China is unafraid of coal and nuclear energy & lack the environazi resistance we face here. That is, they’ll have the generating capacity and distribution to support gazillions of watts of energy required by eeeeveeees.
What lies at the end of the road to electrification?
Why, Ol’ Sparky, of course…
https://encyclopediaofarkansas.net/media/old-sparky-8061/
Welcome to your Brave New World.
The EV issue aside, Maximum Bob Lutz predicted years ago that there would be consolidation in the industry because the world doesn’t need a dozen different companies building the ubiquitous, compliance 2.0T engine.
I believe he indicated the likelihood of manufacturers merging regionally (i.e. Ford & GM, BMW & MB) to accomplish this.
Sounds like the same result but for slightly different reasons.
To hear the media champion what the Chinese have as an “auto industry” sounds more like they’ve simply cornered the market on oversized, HIGHLY flammable golf carts.
And that’s the phony market that all manufacturers except Toyota (and their alliance with Subaru & Mazda) seem to still believe is the future?
The China play hasn’t really worked out. Neither has India. The overly optimistic view from 20 thousand feet is that there are ~two billion people emerging from poverty and they’re going to want to buy stuff. In China what they bought was US debt (the CCP at least), unprocessed food and real estate. Not US real estate, but Chinese. Turns out the CCP wouldn’t let the people invest in US companies, so they invested in their own. Same thing with India.
Worked out great for the federal government though. They exported all those dollars that came back as new t-bills and debt. Kept the economy going far longer than any of the naysayers predicted.
But now that the world (Europe) is once again choosing up sides, I wonder if the mary-go-round of money will continue? When it stops it won’t be pretty, that’s certain. And that’s why Trump won in a landslide. The establishment has been kicking that can since 2008. That can is about to run out of road, and like the flat earth there’s nothing past the edge.
Not to worry,,, in 31 days we’re saved by the orange poltroon. It will soon be bliss.
Hi Ken.
My advise? Hope for the best and plan for the worst. Or as the old saying goes “The only person who can save you is you”.
He’s bound to accomplish something but I’d say it’s better to cover your own ass just in case.
Trump is a smart guy. He’s gone through a number of bankruptcies, even successful gamblers lose. So he understands the process.
The dollar is going to finally snap under the accumulated stress of communist spending, there is no way around that.
Afterwards, though, there are a couple paths. To be sure, there will be variations on them, but ultimately there are two.
One path preferred by the forces of darkness includes things like CBDCs, UBI, and absolute control over every living soul (hat tip the late Leonard Cohen). With the powers of this earth keeping all real wealth (gold, silver, productive enterprises) for themselves as always.
The other path preferred by the forces of light must include forgiveness, with a debt jubilee, freeing of prisoners, and repudiation of debt.
One path leads to an eternity of communist stagnation and misery. The other leads to a continuation of humanity as a species.
Thing is though, what’s in your wallet? More correctly, what’s in your 401(k)? If you’re like most Americans (which I’m guessing you probably are not) your nest egg is stored up in index funds and other blown up assets. When the debt resets, the best case scenario is that everyone resets their dollars to the new standard. At worst, well, better enjoy foraging because that’s how you’re going to spend your retirement years.
The MMT fools get one thing right -We owe it to ourselves. Not the debt, but the stock price. The people who trade on our behalf take the cream off the top but the bulk of the value of the NYSE is people pumping their retirement into the market. Because that’s what they were told to do.