Did you know that Japanese automobile giants Honda and Nissan were rumored to be in merger discussions? Neither did we. Nor did we know a key factor: growing Chinese dominance of the market for cars in China and beyond.

The Wall Street Journal reports last week that as with so many other industries, China is making tremendous gains in the auto sector.

“More than half of new cars sold in China today are either fully electric vehicles or plug-in hybrids,” the Journal reports, add that “Three in five Chinese buyers are choosing a domestic brand, the highest ratio since the country emerged as the world’s largest car market.”

Now, China is looking to take that dominance to other countries.

Consider the recent results for Honda and Nissan. As seen in the graphic below, sales of the rumored suiters have fallen from over 1.5 million each in China in 2019 to what looks like less than 750,000 for all of 2024.

Source: Wall Street Journal

And China’s passenger-car exports quintupled between 2020 and 2023, hitting 4.1 million vehicles last year, according to industry data.

“The Honda-Nissan combination would be aimed at combating the Chinese push by combining the Japanese carmakers’ efforts in EV technology, autonomous driving and other areas where China is strong,” the Journal says.

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