Nissan-Honda Merger: Navigating Antitrust Hurdles

The proposed merger between Nissan and Honda, two of Japan's largest automakers, has the potential to reshape the global automotive landscape. However, the combined entity would control a substantial market share, raising concerns about pricing power and potential market manipulation. This article explores the antitrust hurdles Nissan and Honda may face in their merger talks and how the Japanese government's blessing could influence the review process.

The combined sales of Nissan and Honda would top 7 million vehicles annually, making it the third-largest automaker worldwide (Source: NTV). This scale could help them better compete with established EV leaders like Tesla and BYD, which currently dominate the market. However, the merger may face antitrust hurdles, as it could potentially reduce competition and increase market concentration. Regulators may scrutinize the deal to ensure it does not stifle innovation or raise prices for consumers.



In the United States, for instance, the combined market share of Nissan and Honda in the passenger car segment was around 15% in 2021 (Source: IHS Markit). This is significant, as the U.S. Department of Justice considers a market share of 10% or more as a potential antitrust concern. Additionally, in the Japanese domestic market, the combined market share of Nissan and Honda in the passenger car segment was around 30% in 2021 (Source: Japan Automobile Manufacturers Association). This high concentration could raise antitrust concerns, as the Japanese Fair Trade Commission has previously investigated and penalized automakers for anti-competitive practices.

Furthermore, the combined market share of Nissan and Honda in the electric vehicle (EV) segment, which is a key growth area, was around 10% globally in 2021 (Source: International Energy Agency). This could potentially raise concerns about the merged entity's influence over pricing and innovation in the EV market.



The Japanese government's blessing could expedite the antitrust review process for a Nissan-Honda merger, given their shared interest in maintaining Japan's global automotive competitiveness. However, the government may also impose conditions to protect domestic employment and ensure the merged entity's commitment to innovation and sustainability.

In conclusion, the proposed merger between Nissan and Honda faces significant antitrust hurdles. The combined entity would control a substantial market share, potentially stifling competition and innovation. The Japanese government's blessing could facilitate the merger, but regulators may scrutinize the deal to ensure it does not raise prices or hinder innovation. As the merger talks progress, investors should closely monitor the antitrust review process and its potential impact on the global automotive market.