Photo/Illutration Nissan Motor Co. and Honda Motor Co. intend to discuss management integration. (Asahi Shimbun file photos)

Fears of a foreign takeover of Nissan Motor Co. prompted partner Honda Motor Co. to raise the possibility of management integration, sources said.

Hon Hai Precision Industry Co., a Taiwanese electronics contract manufacturer known as Foxconn, has been cited as a potential suitor of the beleaguered automaker, they said.

Hon Hai acquired a controlling stake in electronics maker Sharp Corp. in 2016 after the Japanese company was saddled with liabilities exceeding assets.

The Taiwanese company, which has grown as a contract manufacturer of Apple Inc.’s iPhones, has set its sights on electric vehicles as a key source of revenue after smartphones.

Hon Hai was apparently considering purchasing Nissan shares that are still owned by French automaker Renault SA, which brought Nissan under its control in 1999.

Nissan could be a bargain for potential suitors like Hon Hai.

Its share price is stagnating, particularly after the company in November reported a 90-percent operating profit decline for the April-September period due to lackluster performances in the United States and China.

At the close of trading in Tokyo on Dec. 18, Nissan’s market value stood at about 1.55 trillion yen ($10 billion), one-fourth of Honda’s and ranked sixth among domestic automakers.

In 2023, the Hon Hai group recruited Jun Seki, former vice chief operating officer of Nissan, as chief strategy officer for EVs.

Seki was appointed to Nissan’s No. 3 post in 2019 but left the company within weeks to serve as president of motor manufacturer Nidec Corp.

He was dissatisfied with his position in Nissan’s troika leadership, headed by Makoto Uchida, president and chief executive officer, according to a source.

Honda and Nissan announced in March that they would collaborate mainly on EVs, but it took until August before they agreed on five specific areas of cooperation.

Four months later, the two companies are finalizing plans to start talks on integrating their management, likely under an umbrella holding company.

Mitsubishi Motors Corp., whose top shareholder is Nissan, could also join the alliance.

Honda is the second-largest Japanese automaker, but its global vehicle sales volume is less than half of industry leader Toyota Motor Corp.

A foreign takeover of Nissan, a key partner in the EV business, would jeopardize Honda’s growth strategy as the global industry shifts away from gasoline vehicles.

Multiple sources said Honda has been particularly eager to speed up discussions on prospective management integration.

Together with its half-year earnings results, Nissan announced restructuring measures, such as cutting 9,000 jobs and paring global production capacity by 20 percent.

Outside directors called Uchida to account.

A management integration proposal was a “godsend” for Nissan as the company faced difficulties rebuilding its operations, a source said.

A senior government official welcomes expected management integration talks.

“It would be better for Nissan to join forces with a Japanese company than falling into foreign hands for a second time,” the official said.

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