Car dealers say a Nissan-Honda merger would help solve a big problem: Customers want hybrids.
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- Nissan and Honda confirmed Monday that they're in merger talks.
- Nissan's lack of hybrids has affected the success of popular models like the Rogue.
- Honda has seen big sales increases for popular models with hybrid offerings.
A tie-up between Nissan and Honda could solve one big problem for Nissan: a lack of hybrids.
That's what dealers who spoke with Business Insider said last week amid reports that the Japanese automakers are in talks to create a new global auto goliath. Now, this week, the automakers have confirmed the chatter — saying they're indeed in official merger talks. Mitsubishi Motors also is involved in the talks, the Monday statement from the companies said.
Nissan is one of few car manufacturers in the US without a hybrid or plug-in hybrid offering, despite taking an early lead in EV sales with the Leaf in 2010.
Green car shoppers have turned away from EVs in favor of hybrid models this year, leaving Nissan with unpopular and unprofitable battery-powered offerings in the Leaf and Ariya SUV.
Nissan dealers have dealt with slumping sales all year, particularly for the brand's top seller, the Rogue. Once a segment leader, sales of the Rogue fell 10% through the first nine months of the year compared to the same period last year, according to company data.
And dealers say they're losing customers to Honda and Toyota, which have hybrid versions of their CR-V and RAV4 SUVs.
One dealer with both Nissan and Honda stores says it's "painfully obvious" that Nissan is losing customers to brands with more hybrids. The dealer didn't want to be identified, but Business Insider confirmed his identity.
He said it has become common for a Nissan shopper to migrate to the Honda store after they realize there aren't any hybrids.
Following disappointing sales results in the first quarter, Nissan CEO Makoto Uchida acknowledged the hybrid blind spot, saying during an earnings press conference that until last year, Nissan wasn't able to predict the rapid rise in demand for hybrids. The company has said it is shifting efforts toward hybrid offerings, but dealers and automotive industry experts say that change could take years.
Meanwhile, Honda is riding the hybrid wave this year as customers gravitate toward the hybrid versions of the CR-V SUV and Civic sedan. Just this month, Honda said it has plans to double its global hybrid sales to 1.3 million vehicles by 2030, as it aims to create a "bridge" to EV adoption.
Dealer skepticism over another auto merger
Still, some dealers are wary of yet another global auto merger.
Adam Lee, a dealer in Maine with several major brands, including Nissan, Honda, and Chrylser, said he's grown cynical about promised "synergies" after experiencing several different mergers as a Chrysler dealer.
"Show me a merger where the synergies actually existed, and I'll show you something that doesn't exist," Lee said. "I'm trying to give them the benefit of the doubt, but I tend to be cynical about anything like this."
Chyrsler-owner Stellantis is in the middle of a tough transition right now, as the CEO who led the merger of Fiat Chrysler and PSA stepped down suddenly at the start of the month. Before that, Chrysler lived through a messy marriage with Germany's Daimler in the late 1990s and early 2000s.
Lee said Nissan could probably use some help with hybrids and other plug-in models but argued: "You don't necessarily need to merge to do that."
