Carmakers have not one existential problem to contend with, but two. They need to make money on their combustion engine vehicles in a hypercompetitive and — over time — shrinking addressable market. Meanwhile, they have to navigate the bumpy but unstoppable transition to electric vehicles.
A mooted tie-up between Honda and Nissan, which would create a Japanese behemoth with revenues of $220bn, would help with the former. But traditional remedies aren’t much good when it comes to imagining, investing in and building a whole new business model. That requires some creative thinking.
First the good news. Honda and Nissan, with the possible addition of Mitsubishi Motors (in which Nissan has a near 27 per cent stake), would boast a combined annual production of about 8mn vehicles. That would vault them into fourth place in global rankings, not a million miles behind leader Toyota which is expected to sell about 10mn vehicles this year.