Experts on Honda and Nissan’s talks to deepen ties By Reuters

(Reuters) – Honda: (NYSE: ) and Nissan ( OTC because (NASDAQ. ) and Chinese competitors.

Here are the experts’ comments.

SANSHIRO FUKAO, ITOCHU RESEARCH INSTITUTE, TOKYO.

“This deal appears to be more about saving Nissan, but Honda itself isn’t resting on its laurels. Honda’s cash flow could deteriorate next year, and its EVs aren’t doing very well itself will have to change dramatically. It may need to spin off its motorcycle business, and it will have to build a strong financial base from motor vehicles if they are facilitated through the creation of a holding company. (with Nissan) then it will be a positive thing for Honda.

“If their thinking is no more than ‘we can manage it,’ I don’t think they can survive anymore. The speed of the Chinese automakers is no longer in the era where the automakers will come together, profit.” get through economies of scale and then reinvest them in a five-year rebuilding plan, they don’t have time for that.”

TANG JIN, SENIOR PRINCIPAL RESEARCHER, MIZUHO BANK, TOKYO.

“Honda has a unique, technology-focused culture with strong strengths, so there should be some internal resistance to a merger with Nissan, a competitor with a different culture that is now wavering.

“Honda itself doesn’t have that many management resources. It faces a big challenge in how it can accelerate its transition to electrification by making money from hybrids and motorcycles. Nissan, on the other hand, has no choice.

“The auto industry is currently undergoing rapid change … so if the two companies can’t make decisions and execute them in unison and quickly, they may not be able to keep up with the changes.”

SEIJI SUGIURA, SENIOR ANALYST, TOKAI TOKYO INTELLIGENCE LABORATORY, TOKYO.

“Honda’s internal opinion is probably divided and doesn’t monolithically support the merger. Because their motorcycle business is going well. They certainly have problems for four wheels, but they weren’t in dire straits either.”

“In the medium to long term, this is good for the Japanese auto industry because it creates a second axis Toyota: (NYSE:) Constructive competition with Toyota is a positive for the rather stagnant Japanese auto industry, which has to compete with Chinese automakers, Tesla and others.”