Global Auto Industry Consolidation

The global auto industry is undergoing significant changes, with an oversupply of vehicles leading to discussions about potential mergers among major players like Honda and Nissan. The current market has an excess capacity of cars, including electric vehicles (EVs), hybrids, and combustion engines, which is driving down profit margins. Chinese automakers dominate the market, producing around 7 to 8 million vehicles annually while only meeting a domestic demand of 2 to 3 million, creating a surplus that must be exported. This situation may compel manufacturers to consolidate to address the capacity issue and boost profitability.