Nissan Motor Co. is reportedly in advanced discussions to manufacture vehicles for Honda Motor Co. in the United States, according to the Nikkei, as the carmaker seeks to optimise operations at its under-utilised production facility in Mississippi.
The Canton plant, located in Mississippi and currently responsible for models such as the Nissan Frontier, is being considered for the production of Honda pickup trucks, the report stated. The potential collaboration marks a shift in strategic direction for the two Japanese automakers, particularly following the collapse of earlier merger talks aimed at creating the world’s third-largest car manufacturer.
Despite the breakdown of merger discussions earlier this year, both companies have reiterated their commitment to continuing cooperation in key areas, including electric vehicle (EV) development.
In a brief statement issued on Friday, Nissan confirmed that it had no further updates at this time but emphasised that joint projects with Honda remain ongoing. The company declined to comment on what it characterised as market speculation. Honda representatives were not immediately available for comment.
Nissan’s drive to streamline its global operations comes amid significant financial challenges. The company reported a net loss of US$4.5 billion for the financial year ending in March. With declining sales and an ageing product portfolio, Nissan faces mounting pressures, including a maturing debt portfolio of approximately ¥700 billion (US$4.8 billion) due this year. Its credit ratings have been downgraded to junk status by all three major agencies.
Under the leadership of newly appointed CEO Ivan Espinosa, Nissan has initiated a comprehensive restructuring plan that includes the closure of seven manufacturing plants and a 15% reduction in its global workforce.
The proposed manufacturing agreement with Honda, if finalised, could provide much-needed operational efficiency for Nissan while giving Honda added production capacity in the US market. Both companies continue to contend with growing competition from Chinese manufacturers and trade uncertainties surrounding US-Japan negotiations on automotive tariffs.
-Reuters
