Nissan and Honda are on the brink of a possible merger

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and a potentially huge shakeup in the auto industry.

Transcript

00:00I'm Conway Gittins reporting from New York City. Here's what we're watching on the street today.

00:04The Dow is on track to snap its longest losing streak since 1978,

00:09despite somber news on the housing front.

00:12New home construction projects dropped for a second month in a row,

00:15falling to a four-month low in November.

00:19In other news, Japanese automakers Honda and Nissan are in talks for a possible merger.

00:25The tie-up is largely seen as an attempt to muscle up against a changing of the guard

00:30with Tesla and Chinese automakers gobbling up more global market share.

00:34Honda and Nissan already have a strategic partnership,

00:37but a merger would help them reduce operational costs, share technology,

00:42speed up new car development, and most importantly,

00:45help them battle in an EV price war set off by Tesla and Chinese automakers like BYD.

00:51This will be a complicated deal, with many stakeholders having their say.

00:56French carmaker Renault is Nissan's biggest shareholder,

00:59and Nissan is the biggest shareholder of Mitsubishi Motors.

01:02Contract manufacturer Foxconn also wants to be in the mix,

01:06and there is something else that could complicate any possible merger,

01:10Donald Trump's proposed tariffs.

01:12Both Honda and Nissan build cars in Mexico to be sold in the U.S.

01:17Trump might try to use the merger to get concessions for his America First agenda.

01:23If the talks produce an actual merger,

01:25it would create the world's third largest auto company behind Toyota and Volkswagen.

01:30The combined entity would be worth $54 billion,

01:33with annual auto production of 7.4 million vehicles.

01:37And that'll do it for your daily briefing.

01:39From New York City, I'm Conway Gittins with The Street.

01:47Thanks for watching.

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