Hyperdrive
Dire Situation in China Is One Reason for Honda, Nissan Merger
- Japan’s carmakers have seen business erode in the country
- Overcapacity in China means output cuts have become essential
Nissan made 779,756 cars in China during the fiscal year that ended in March, about half of its peak output in recent years.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
Among the reasons for Honda Motor Co. to enter merger talks with Nissan Motor Co., one looms large: China.
The surging popularity of electric and hybrid vehicles made by BYD Co. and others has erased the leading position that Japan’s automakers once enjoyed as providers of high-quality cars with cachet. That’s left them with too much capacity in local factories that were built to satisfy anticipated domestic demand in the world’s largest market for automobiles.