Japanese auto giant Honda and its struggling rival Nissan agreed Monday to launch talks on a merger seen as a bid to catch up with Chinese rivals and Tesla on electric vehicles.Their collaboration would create the world’s third largest automaker, expanding development of EVs and self-driving tech.But Honda’s CEO insisted that it was not a bailout for Nissan, who last month announced thousands of job cuts and reported a 93 percent plunge in first-half net profit.”This is not a rescue,” Toshihiro Mibe told reporters, stressing that one condition for the merger would be for Nissan to complete its so-called “turnaround” plan.Lacklustre consumer spending and stiff competition in several markets is making life hard for many automakers.Business has been especially tough for foreign brands in China, where electric vehicle manufacturers such as BYD are leading the way as demand grows for less polluting vehicles.The two firms along with Mitsubishi Motors said they had signed a memorandum of understanding to start discussions on integrating their business under a new holding company.Citing “dramatic changes in the environment surrounding both companies and the automotive industry”, a joint statement said the companies planned to list the holding company on the Tokyo Stock Exchange in August 2026.It comes after reports said Taiwanese electronics behemoth Foxconn had unsuccessfully approached Nissan to acquire a majority share. It then asked Renault to sell its 35 percent stake in Nissan — a pursuit now said to have been put on hold.- Unequal marriage -China overtook Japan as the biggest vehicle exporter last year, helped by government support for EVs.Honda and Nissan — Japan’s number two and three automakers after Toyota — already agreed in March to explore a strategic partnership on software and components for EVs among other technologies.This partnership was joined by Mitsubishi Motors in August.The companies want to seal their merger deal in June next year, but it is unlikely to be a marriage of equals.Honda will nominate the president of the new holding company, whose board will be mostly made up of Honda executives, their statement said.Nissan is a majority shareholder of Mitsubishi Motors, which “aims to reach its conclusion by the end of January 2025 on the participation or involvement in the business integration between Nissan and Honda,” it added.Honda and Nissan’s partnership could include a manufacturing tie-up where they build vehicles at each other’s plants, local media said.- ‘Panic mode’ -Nissan chief Makoto Uchida praised Honda’s agility and ability to adapt as the industry shifts, praising the company as “a partner who can share the sense of crisis about the future”.”As the business environment for automakers changes in the future, I believe we will not be able to get there unless we have the courage to change ourselves,” Uchida said.Nissan has weathered a turbulent decade, including the 2018 arrest of former boss Carlos Ghosn, who later jumped bail and fled Japan concealed in a music equipment box.Ghosn told reporters in Tokyo on Monday via video link from Lebanon, where he is at large, that turning to its arch-rival Honda showed that Nissan was in “panic mode”.Although the two companies might be able to “find synergies for the future… I don’t see anything obvious into this partnership or this alliance”, Ghosn said. 

Asian markets rose Monday after big gains on Wall Street, with traders welcoming below-forecast US inflation data that tempered worries that the Federal Reserve will take a more hawkish tone with interest rates next year.A holiday-thinned week got off to a healthy start after last week’s sell-off sparked by the US central bank’s outlook that suggested officials will not lower borrowing costs as much as previously hoped over the next 12 months. Sharp losses in reaction to the forecasts were pared after data showed the personal consumption expenditures (PCE) index, the Fed’s preferred gauge of inflation, came in at 2.4 percent on-year in November.While the reading was up slightly from October, it was lower than expected, providing some optimism that policymakers were winning the battle against prices and would have room to keep cutting rates.The figures led to a pullback in US Treasury bond yields that had jumped last week to their highest levels since May, helped by comments from Chicago Fed chief Austan Goolsbee, who expressed confidence that inflation was returning to the bank’s two percent target.Still, there remains some trepidation among investors as Donald Trump prepares to return to the White House, pledging to cut taxes, slash regulations and impose tariffs on imports, which some economists warn could reignite inflation.Ronald Temple, chief market strategist at Lazard, said in a commentary: “The initial response to the US election was positive as investors focused on the obvious tailwinds to profitability: lower corporate tax rates and less regulation. “However, I expect much more dispersion within the equity market when the reality of a much-less-friendly trade environment sets in.”All three main indexes in New York ended more than one percent higher.Asia followed suit, with Tokyo, Hong Kong, Sydney, Singapore, Seoul, Taipei, Mumbai, Bangkok and Manila all in the green. Shanghai was the sole decliner.London, Frankfurt and Paris were all lower in early European trade.The dollar also held losses suffered in the wake of the PCE data, with the yen, pound and euro all stronger than Thursday.Investors were also cheered by news that US lawmakers had reached a deal to avert a Christmastime government shutdown following marathon talks on Friday.The last-minute scramble came after Trump and billionaire Elon Musk pressured Republicans to abandon an earlier bipartisan funding compromise. Lawmakers then spent several days trying to hammer out another deal, with massive halts to government services hanging in the balance.Non-essential operations would have ground to a halt if no deal had been struck, with up to 875,000 workers furloughed and 1.4 million more required to work without pay.”This agreement represents a compromise, which means neither side got everything it wanted,” President Joe Biden said on signing the bill on Saturday.”But it rejects the accelerated pathway to a tax cut for billionaires that Republicans sought.”- Key figures around 0900 GMT -Tokyo – Nikkei 225: UP 1.2 percent at 39,161.34 (close)Hong Kong – Hang Seng Index: UP 0.8 percent at 19,883.13 (close)Shanghai – Composite: DOWN 0.5 percent at 3,351.26 (close)London – FTSE 100: DOWN 0.2 percent at 8,065.68Euro/dollar: DOWN at $1.0419 from $1.0431 on FridayPound/dollar: UP at $1.2576 from $1.2567Dollar/yen: UP at 156.52 yen from 156.45 yen Euro/pound: DOWN at 82.85 pence from 82.98 penceWest Texas Intermediate: UP 0.5 percent at $69.78 per barrelBrent North Sea Crude: UP 0.4 percent at $73.24 per barrelNew York – Dow: UP 1.2 percent at 42,840.26 (close)London – FTSE 100: DOWN 0.3 percent at 8,084.61 (close)