There are two ways to look at the news out of Japan this morning. Either you focus on a Nissan exec saying “We have 12 or 14 months to survive” or you focus on the fact that, if Nissan can’t get it together, it’ll probably have to sell a huge chunk of the company to Honda. I think a potential merger makes a lot of sense and could produce a lot of fun cars.
I’m not going to be a vibe killer in today’s Morning Dump. No, friends, I’m going to be a Mr. Brightside. How are sales going? Sales are looking up in November as buyers get a bit of rate relief and incentives continue to grow. Is news that Cadillac is discontinuing the XT4 a bad thing for people who want an affordable car, or a good thing for buyers looking for a cheaper luxury electric car?
Volkswagen is going to leave its Xinjiang plant in China, which sounds like more problems for the automaker in Asia, but the reality is that the plant is alleged to be involved in abuses against the local Uyghur population.
Everything is coming up Milhouse, today!
I Am Shipping Nissan And Honda, As The Kids Say
I probably get about as many things wrong as I get right. This will not be immediately apparent as the perch of a daily news roundup allows me to beak about the automotive happenings of the day, and if I’m correct I get to crow about my abilities as a prognosticator. If I’m wrong, well, there are probably hundreds of posts between my incorrect guess and reality, which keeps the mocking to a minimum (when I’m wrong, please tweet about it and @ me).
It was back in August of this year that I came to the reasonable conclusion that Honda and Nissan should just be one company, writing:
Toyota has a market cap of almost $300 billion. Honda and Nissan, combined, have a market cap of less than $70 billion. Nissan couldn’t make the Renault relationship work because the underlying concept of a Japanese company being owned by the French state was a bridge too far.
A consolidated Nissan and Honda bring engineering and manufacturing scale without the huge culture clash. I also don’t think their products are so similar that they can’t work in concert. Nissan/Mitsubishi have a truck competency that Honda lacks whereas Honda is way better at building hybrids.
Oh, yeah, Nissan and Mitsubishi are already tied-up, so that is just a part of the deal.
This makes almost too much sense to me and, according to a new report in the Financial Times, it’s closer to happening than ever:
“We have 12 or 14 months to survive,” said a senior official close to Nissan.
Nissan has not ruled out having Honda buy some of its shares, with “all options” being considered, as it launches a series of restructuring measures on the back of declining sales in both China and the US, the people said.
In addition, people close to Renault said it would be open to selling a portion of its shares in Nissan to Honda as part of a restructuring of its 25-year-old Nissan alliance. One person close to Renault said a stronger relationship between Nissan and Honda could “only be positive” for the French group.
The article gives the sense that maybe Honda ownership is a “last resort,” but with activist investors buying shares in Nissan we’re definitely closer to the last resort than the first resort.
This could be awesome. Historically, Nissan and Honda have made some bonkers cars. We were just listing them in Slack and it’s something you could do all day. Figaro, S30, Z32, NSX, Integra, V6 manual Accord Coupe, 1st gen Euro HR-V. Just great cars all the way down.
It’s possible Nissan gets itself sorted and is able to limit this to a partnership, but just look at what Toyota is doing in its partnership with Mazda. The smaller company lacked a good hybrid option and now you get the CX-50 with the RAV4’s powertrain. Imagine Nissan being able to leverage Honda’s hybrid powertrains, Honda being able to leverage Mitsubishi’s plug-in systems, and all of them sharing one global mid-size truck platform.
Good times are here again if Nissan and Honda (and Mitsubishi) team up, I think.
November Is Going To Be A Good Month For Car Sales
The car market this entire year, in general, has just been slightly ahead of last year, with the exception of November, which is ahead of last year by a greater margin according to S&P Global Mobility. Analysts project a SAAR (seasonally adjusted annualized selling rate) of about 15.9 million, compared to 15.5 million last November. That’s good news.
What’s going on? Here are the highlights from Cox Automotive:
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Consumer sentiment has reached a 3.5-year high, driven by post-election optimism.
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Retail vehicle sales have shown significant strength, with both new and used sales up 11% compared to 2023.
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Auto loan rates are declining, with the average used rate at 13.76% and new rate at 9.12%.
You may or may not be happy with the results of the election, but I think most people are relieved it’s over. That, coupled with strong incentives and an improvement in auto loan rates, should bring more people back into dealers this Christmas.
We’re going to end up short of where I projected we’d be (see, I get things wrong), though I think a strong December will help bring it closer in line with initial expectations.
The Death Of The Cadillac XT4 Isn’t That Bad, Right?
Every time I see a Cadillac XT4 I have to remind myself that the XT4 is a vehicle that exists. It’s a totally fine crossover and one that brings people into dealerships as an entry-level luxury car. Cadillac needs more than just another “fine” car. It either needs something great and truly affordable, like the Buick Envista, or it needs something extremely competitive.
For Cadillac that means dumping the XT4 and picking up the new Cadillac Optiq which, though an EV, seems like a big improvement. As Thomas pointed out:
See, not only is this a proper all-wheel-drive luxury crossover that’s bordering on midsize, Cadillac is planning on selling the base trim for $54,000 including freight. That’s roughly rear-wheel-drive Genesis GV60 money, base-trim Volvo XC40 Recharge money, or Audi Q4 e-tron money for a larger EV.
The price tag should bring it, post tax-credit, within range of the XT4 for something much much better. Or, as one dealer put it in Automotive News today:
The impact on retailers ultimately may be regional and depend on local EV adoption rates, said Howard Drake, who owns Casa de Cadillac in Los Angeles.
Cadillac’s plan to phase out gasoline vehicles has been well-publicized, he said, though he didn’t think the XT4 would go first. Drake’s dealership has had success selling the Lyriq, though, so he’s optimistic the Optiq can take the XT4′s place in his market.
“This is just Casa’s opinion,” Drake said. “There’s more people looking to go into EV in that segment than there are ICE buyers looking for the next vehicle.”
I’m now tempted to start every sentence today with “This is just Casa’s opinion.”
VW Out Of Xinjiang
This is just Casa’s opinion, but it’s a good thing that Volkswagen is getting out of its Xinjiang plant.
VW and SAIC will sell their plant in Xinjiang to Shanghai Motor Vehicle Inspection Certification (SMVIC), a unit of state-owned Shanghai Lingang Development Group, which will take on all its employees, they said.
Under the terms of the deal, for which financial details were not disclosed, SMVIC will also take over SAIC/VW’s test tracks in Turpan, Xinjiang, and Anting in Shanghai. Volkswagen will then no longer have a presence in Xinjiang. Beijing has denied any abuses there.
The global reaction to the Chinese government’s treatment of the local Uyghur population has already caught Volkswagen off-guard and it’s good to just resolve it. It’s also a positive sign for Volkswagen that it’ll have a partner in SAIC for another ten years.
What I’m Listening To While Writing TMD
That’s right, it’s Electric Light Orchestra with “Mr. Blue Sky” because that’s my attitude today.
The Big Question
What’s your favorite Nissan and what’s your favorite Honda?
If you’re optimistic after the election you’re either an obscenely wealthy white man or a complete idiot.
name checks out
Thanks for letting me know which category you fall under.
I am just glad the song of the day wasn’t the Killers after the opening. ELO rules.
Fav Nissan – I have something with a fire-breathing SR20DET, so I suppose the Silvia.
Fav Honda – I regret never owning an S2000, but Elements are what I still shop for. So either Element or 2nd gen CRX.
Regarding Honda and Nissan… I see no benefit to that tie up. And everyone assumes that a bigger company will “scale better”. Here’s the thing… sometimes a bigger company DOESN’T scale better and it simply becomes unwieldy with too much duplication and overlap.
“What’s your favorite Nissan and what’s your favorite Honda?”
My favourite Nissan was the Maxima SE of the late 1980s and early 1990s.
My favourite Honda is a tossup between the S2000 and the NSX
Totally agree. Honda isn’t as good as they used to be and taking on a failing Nissan will further dilute their management efforts. Nissan needs to become a part of Stellantis and the whole thing can go down the tubes (with Ram and Jeep being sold off on the way).
Nissan = Hardbody, Honda = CRX Si, or stretching a little bit to include Acura, the 1st gen Integra. Nobody on planet earth has ever built a better 4 cylinder than the Honda B/D/F engines of the 80’s and 90’s.
Honda: First Gen Insight
Nissan: eNV200
Favorite Honda is the Acura NSX, Favorite Nissan is still the GTR, but both are not really bread an butter so they would be disqualified for much.
Probably the biggest thing Honda could do for Nissan, besides providing Honda branded Transmissions to remove all Jatco Bad feelings about the brand would be to really revive the Titan. they were a seemingly decent competitor to the big three and with the Tundra revision, the opportunity for a decent Honda Big truck to give it reliability street cred to go with a revised style would seem to be a big opportunity now that the 3rd runner, Ram, is faltering a bit.
Similarly, IMO the Frontier went from the bottom of the desirable list to the top.
Before: Wow, the Frontier is still based on old tech. :/
Now: Wow, the Frontier is still based on old tech! 😀
Having said that, if I were in the market for a truck in that category, and the prices were similar, I would get a Ridgeline over the Frontier. Nissan is crazy to charge Ridgeline or Tacoma prices for the Frontier (at least on the sticker). They should just lower the damn price and watch people flock to the showrooms.
I would say the Tacoma at least the base ones I see a lot are also fairly old tech. leaf springs, basic NA 4 cylinder and not to fancy screens or anything inside. But they are dead reliable. I kind of felt the old Frontier was similar, and I was hoping they would not muck it up too much, I am kind of glad actually it was only marginally changed. I kind of would have like to see the old V6 stay as the base motor, but that is just because I like d the old V6 over a turbo 4. Still they did not go Jatco, they are still offroad capable and the price they advertise definitely makes you look twice.
Honda has a storied history of making terrible auto transmissions.
It felt like Nissan had a good thing going with Renault, but fought it every step of the way.
It needs to look at itself and wonder its purpose in life. Because, right now, I don’t think anyone quite knows what they are doing, nor want they want to do.
But I think they need to spend a bit more time on fixing their own house, before they think to ask for buyers. It’ll be less painful for the people that way when new management comes in and cuts heavily.
They kept Ghosn for far longer than they should have. He was exactly what they needed to get them out of the hole they were in at the time, but the man seemingly had no interest at all in innovation.
Favorite Nissan, Figaro, they were crazy enough to build the dang thing.
Favorite Honda, CRX, sporty economical looks the business, runner up original Insight, 80mpg hybrid with a manual.
But if Honissubishi becomes a thing I don’t see that getting them out of much trouble, look at what’s happening with Stellantis and VW, compared to like Toyota that’s basically just Toyota.
Buying Nissan will ruin Honda like what McDonnell Douglas did to Boeing
My thoughts exactly.
I think partial ownership and effective control, like Toyota has with Mazda and Subaru would make sense. Consolidation of the Japanese auto industry along these lines seems most effective, rather than full mergers. Now I’m much more sanguine about Toyota-Mazda-Subaru than I am about Honda-Nissan-Mitsubishi, but Nissan and Mitsubishi are stronger in the ROW than the US, I believe.
Close cooperation in areas that make sense, sure, but I really don’t think a full fledged takeover would be at all good for Honda
The blurb about the XT4 is amusingly timely, as I was just reminded the XT4 exists yesterday. We are looking at 3-row vehicles to replace our minivan, and I saw an XT4 mistakenly listed as an XT5 and was like “What is that thing?” I’m sure I’ve seen an XT4 in the wild, but I can’t recall the last time it happened, unlike the XT5 which I see all the time.
As for Honda and Nissan – while I am not exactly eager to see Nissan fail, I really hope Honda doesn’t sabotage themselves by buying Nissan. I’ve been through too many mergers where my employer bought a failing competitor and instead of “seizing opportunity” we were now burdened with an expensive albatross that we couldn’t unload. Nissan would be that albatross for Honda, even if Nissan isn’t as poorly regarded overseas as it is in North America.
Nope nope nope! Stop it!! Keep Nissan away from Honda please. Honda doesn’t need the dead weight!!!!
ELO “Mr. Blue Sky?” Really? Where did we go wrong? Kidding, love ELO.
Favorite Nissan: Hardbody pickup.
Favorite Honda: Element.
The Honda Element is a car I wasn’t mature enough at the time to know it was the car I should have bought.
Well if you needed more proof how ignorant people on a whole are, here you go.
It may have more to do with post-election fear of rising prices due to impending across-the-board tariffs.
I will say that I am a never-Trumper, but an indisputable victory by either candidate is preferable to me than a disputed election and possible civil war.
Yes, I am glad we experienced an orderly election, which eliminated the need for a violent bloodbath
We’re in a civil war, it’s just a cold one.
The only reason it’s undisputed is because the side with morals and intelligence lost. The orange asshole could have lost by twice what he won by and said civil war would be about to start. Either way we’re fucked.
I’m just waiting for the day when Cadillac renames itself Cadilliq.
In that case, you better buckle in for the wait. That’s gonna take a few De La Monthes.
So we are saying Honda will completely own Nissan? Oh yay just what the world needs even bigger corporations and less options.
I agree with the sentiment, but what was the last Nissan you cared about? I’m glad the Z still exists even if it’s not the best, but otherwise Nissan has done nothing for me in over a decade at this point.
Oh for sure I am not defending Nissan they haven’t really released anything of interest to me since the Xterra and I could not tell you what they have in their current lineup besides the Z, Frontier and Pathfinder. Just will suck to see another corporation get consumed up and governments not doing anything about it.
“Shanghai Lingang” sounds like a fate worse than death!
It also sounds like a title for an episode of “Matt and Shane”. lol
I’ve always liked the styling of the XT4, I guess it’s getting on a bit in age, but still looks good. The XT5 doesn’t look dated to me either but I didn’t realize how old it is. But not having any ICE crossover entry seems like a miss. Look at Acura, which has plans for EVs and sells an Ultium crossover now, has the RDX for a bit and is introducing the ADX.
A reminder for those wondering on Nissan vs Honda: even though Honda has long held rank over Nissan in the US, that’s not the case in every market globally. Even if Nissan isn’t doing well overall, they have a lot more presence than Honda does in some markets. Ex: Qashqai (Rogue Sport) and Juke have been top sellers in the UK for some time, Nissan was up in Australia last year – they may be a fraction of even Mazda, but their sales were more than triple those of Honda.
I don’t think it’s all about making a Honda Fridgeline or Nissan will just sneak some Altima badges on an Accord but I imagine there’s crossover in development and production, be it models, powertrains, whatever, that makes a lot of sense for the two overall.
Favourite Nissan has to be the R33 Skyline, But I am biased as I have owned one for over 20 years.
Honda, The NSX of course, However I drove an Integra Type R and found it hilarious fun.
I think it’s more of the case that Nissan needs some sort of rescue again, the Japanese government doesn’t want it to come in the form of a foreign company getting even greater control over the company than Renault had at the peak of the alliance, so Honda might get pressured into doing it to keep everything domestic. It’s not so much what Honda wants as it is what the government wants and Nissan needs
Japan has some history of doing things this way, as did Britain, back when there were still large British companies in industries other than banking, retail, and defense
Why would Honda want anything from Nissan?
Honda does not need the taint of the sub-prime buyer market.
Honda does not need the “it’s not a Tacoma/Tundra” truck market.
Honda already has compelling SUVs.
Honda has it’s own history of interesting sportscars.
Honda barely knows what to do with Acura – They do not need two or three more brands (what is the point of Infiniti anymore?) to manage.
Honda’s business gets bigger and it’s value increases simply from Nissan disappearing – all at zero cost/hassle.
It’s smarter to sit back and watch your competition self-immolate, then pick up any pieces you want afterward in the liquidation.
I don’t get it either. The take here seems to be that Honda would revive the golden days of Nissan, but they aren’t even reliving the golden days of Honda…so why would they acquire Nissan and come out with a new 240SX or a modern R33 Skyline? Go work on a modern S2000 instead.
Honda buying Nissan would be like voluntarily tying cinder blocks to your legs when you are trying to swim in the ocean. No reason to do it, and it will just create problems.
I look back fondly at the old days of Nissan, and it sucks they are sinking, but I look at current Nissan and it is pretty easy to see why. There is no compelling reason to go to a Nissan dealer these days, aside from the people who just need the cheapest new car they can find.
Dunno, trucks are a big market in the US and Honda has effectively zero credible offerings in that space. Hondas are also expensive, the partnership could allow one brand to focus on providing value options without the pressure to move upmarket for wider margins and the other to focus on a more premium product without worrying too much about loosing market share. Bin the Infinity brand and spin up a next gen RWD based platform to underpin some higher end Acura branded models that could realistically compete with Lexus/MBZ/BMW midsized sedan/suv offerings…
Honda really has no need for a big BoF truck when the Ridgeline sells decently well and the people who own them seem to love them. Really the best thing they can do in the truck sphere is bring the Ridgeline a little more up to date and add a hybrid option.
It’s a thing of value that Nissan would bring to the table in a joint venture/partnership/bailout situation. Honda doesn’t need a new truck model, but they would need their investment to be profitable. Trucks are profitable. Nissan makes trucks. Honda does not make trucks. Nissan’s truck line could represent a source of revenue that could be invested in/expanded without cannibalizing any of Honda’s existing market. Is it alone enough to make the investment worthwhile? Dunno, that’s *way* above my pay grade.
Trucks may be profitable, but I’m not sure if Nissan’s trucks are profitable. The Frontier seems to be getting fairly middling reviews as well. I don’t know what they’re missing, or if Honda even has what they’re missing. My guess is that Nissan simply no longer comes to mind when people want a truck.
And Nissan failed at trying to crack into the full-size pickup market. Toyota did it, so it isn’t impossible, but the Titan faded into obscurity until it was discontinued.
If Honda really wants Nissan/Mitsubishi Trucks – it’s far, far cheaper and easier to purchase that production capability and tooling in liquidation than to burden themselves with all the excess portions of Nissan’s business – which includes three additional US dealership networks, with their own selfish, contractual product demands.
Let Nissan Burn.
My favourite
DatsunNissan is the 240z. Just a timeless design.My favourite
AcuraHonda is the original NSX. I’d have one today without a moment’s hesitation.My favorite Nissan would be the 1981 Datsun 200SX I owned back in college, or since Nissan owns Mitsubishi now I guess technically my favorite “Nissan” would be the 1988 Chrysler (MItsubishi) Conquest (Starion) I owned before and after the Nacodatsun.
Favorite favorite? my S13 hatchback. But you know, 510s, 720s, 1200 coupes, all very cool. NSX are great, I wouldn’t turn down a GTR either. Pao’s are pretty excellent, and I love me some EF Civic/CRX.
SAAR (seasonally adjusted annualized selling rate)
You’ve used this term a number of times before, but it hasn’t sunk in yet, so this Casa really appreciates that you spelled out the acronym.
What does Nissan have to offer Honda?
How long for this world is that factory in Tennessee, especially if parts from overseas get more expensive?
A way to sell cheap cars and make fleet sales without diluting the Honda brand?
Honestly I don’t really know.
I may not be very business oriented, but not sure the purpose of buying a crappier version of your current company. I don’t think Nissan has ANYTHING to offer Honda but an opportunity at a fixer-upper?
I mean, Nissan’s product portfolio is pretty weak, they haven’t produced anything terribly innovative in ages (maybe variable compression), their once-good reputation has long been forgotten, Infiniti is an also-ran with dated and unreliable products.
It’s like Jim Gaffigan said, “Oh, are you drowning, let me hand you a baby”. This will not help anything (not that Honda is drowning, but if we’re comparing market cap, they’re not in a position of strength to take on deadweight).
Someone just put Nissan out of it’s misery. For those of us old enough to remember what they once did, it’s so sad to see what they’ve turned into. Let’s just forget everything after post-bubble era nissan, can we just pretend that the Big Altima Energy years didn’t happen and the slipped into the void after the last 300ZX TT was sold?
An outdated sports car platform, an outdated EV hatchback platform, and the Frontier is about 3 things I can come up with, and the first two is a truthful joke.
Maybe keep the trucks, ditch car Nissans and use the factories to make more Hondas.
Favorite Nissan is a clear win for the R32 GTR. Favorite Honda is even more clear as it’s the NA1 NSX. Any other suggestions are incorrect, this was both peak Nissan and Peak Honda.
S2000 people have a case.
That’s fair, but a friend of mine did almost die after his snap-oversteered on him, and their reputation for sketchy limit handling is strong enough that I’d only want to drive one in any anger with some serious upgrades to correct it.