Honda¡¯s crusade to shore up car sales by absorbing Nissan could undermine an oft-forgotten but equally vital part of its company: a thriving motorcycle business.
Honda¡¯s two-wheeler segment, which has already cornered 40% of the global market, could be better positioned to expand further if it¡¯s given freedom, or independence, under a new holding structure. At the same time, its weight and veto power within Honda could mean negotiations may stall if it is made to bear the brunt of Nissan¡¯s shambolic financial situation.
Honda¡¯s motorcycle division will become ¡°even more important as a profit contributor¡± if combining with Nissan has a negative effect in the short term, said Julie Boote, an automotive analyst at London-based research firm Pelham Smithers Associates. The business is important for Honda and executives know it, so they may try to ¡°keep it very much separate,¡± she said.
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