TOKYO: Former Nissan chief Carlos Ghosn on Monday said the struggling Japanese automaker was in “panic mode” as it prepares to start talks on a merger with industry arch-rival Honda.

The two companies are widely expected to announce the merger talks at a press conference later on Monday, part of plans to strengthen their hand in the electric vehicle sector, where Chinese brands are racing ahead.

Ghosn was arrested in Japan in 2018 on suspicion of financial misconduct, but fled the country concealed in a music equipment box the following year while on bail.

“Frankly, I wonder how this is going to work,” the 70-year-old French, Lebanese and Brazilian national, now at large in Lebanon, told reporters in Tokyo via video link.

Debt-laden Nissan last month announced thousands of job cuts and reported a 93 percent plunge in first-half net profit.

Ghosn said he was not sure that Nissan had “the talent… to face the challenges that they are facing.”

“That’s one of the reasons for which they are surrendering in a certain way, in a panic mode, by saying, ‘please help us’. And they’re turning to an arch-rival of Nissan.”

Honda and Nissan — Japan’s number two and three automakers after Toyota — are aiming to finalise a merger deal in June 2025 and actually join forces in 2026, local media said.

Mitsubishi Motors, which could join the new holding company early next year, will also take part in Monday’s announcement.

Ghosn, who denies wrongdoing and says he fled Japan because he did not believe he would get a fair trial, said Nissan had been “marginalised by its own weaknesses and by its own mistakes”.

“Honda is much stronger than Nissan, but still is not a developing force in this industry,” he added.

He said he had been “surprised” to hear of the merger talks because Nissan and Honda’s strengths and weaknesses are in the same fields.

“From an industrial point of view, there is duplication everywhere. So industrially, for me, it doesn’t make sense,” he said.

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.”

Taiwanese electronics manufacturer Foxconn has also reportedly unsuccessfully approached Nissan with a bid to acquire a majority stake.

If the Japanese government prefers Nissan to be “in the hands of another Japanese interest, then it makes sense politically,” Ghosn said.

“But then it means that you are, again, putting control above performance,” he added.

AFP