🌏 Japan’s Nissan and Honda team up to compete

Plus: Stunt of the day

December 18, 2024

IN TODAY’S EDITION
1️⃣ Why Japan’s Nissan and Honda might merge
2️⃣ Why Brazil just banned an Adele song
3️⃣ Stunt of the day

Hi Intriguer. I love dogs with names that could only be human names. I once lived next door to a golden doodle named Bruce. Growing up, a good friend had a dog named Andrew - always Andrew, never Andy.

When getting my own dog, I seriously considered Linda and Brenda, before settling on Wilma. So imagine my delight when I stumbled across an article about a manuscript written in the 1470s entitled The Names of All Manner of Hounds.

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Serious offer: name your dog after any of these medieval masterpieces and I’ll comp any future Intrigue subscription for life. Speaking of amusing names, today’s briefing leads with news of a potential merger between Japanese car giants Nissan and Honda, or as it might soon be known - Nonda.

P.S: Our last daily briefing for the year will be this Monday, but we’ll send a couple of surprises over the break, and will be back to regular scheduling from Friday January 3!

THE HEADLINES

Russia detains suspect in general’s murder. 
Authorities say they’ve arrested an Uzbek citizen they claim planted Ukraine’s bomb that killed Lt General Igor Kirillov and his assistant in Moscow yesterday. Russia alleges Ukraine’s special services promised him $100k and travel to the EU for his help.

Syrian rebel leader to disband armed factions.
Rebel leader Ahmed al-Shara (who recently dropped his nom de guerre Abu Mohammad al-Golani) has pledged to fold all of Syria’s armed rebel groups under the authority of the local defence ministry. But the UN envoy to Syria has said the country’s conflict isn’t over yet, warning of violence between Turkish-backed groups and US-backed Kurds. Meanwhile, an advocacy group has told reporters it’s found a mass grave outside Damascus with upwards of 100,000 bodies.

Biden to announce probe into Chinese chips.
The outgoing Biden administration will reportedly announce a new national security investigation into China’s legacy semiconductors, which could result in additional tariffs and trade restrictions. Biden has repeatedly ratcheted up pressure on China’s chips sector given its possible military and other applications.

Negotiators near Israel-Hamas ceasefire.
A Palestinian official involved in the negotiations has told the BBC they’re in the “decisive and final phase” of securing a hostage-ceasefire deal. Israel’s defence minister (Katz) has expressed a similar sentiment.

More Trump-bassadors.
Donald Trump’s latest nominations include investment banker George Glass (his former ambassador to Portugal) for Japan, real estate tycoon Arthur Graham Fisher in Austria, entertainment wheeler-dealer Stacey Feinberg in Luxembourg, former CIA officer Leah Francis Campos in the Dominican Republic, and long-time friend and businessman Lou Rinaldi in Uruguay. Trump also nominated former football star and unsuccessful senate candidate Herschel Walker to the Bahamas, and Florida philanthropist and art collector Nicole McGraw to Croatia.

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TOP STORY

Japan’s Nissan and Honda team up to compete

Wires were on fire yesterday (Tuesday) after news broke that Japan’s second and third-largest automakers (Honda and Nissan respectively) might be merging.

Before we dive in, the ‘might’ above is actually kinda funny:

  • The two companies put out statements saying the news didn’t come from them, but their two statements also kinda confirmed it by being literally identical; and

  • Japanese media then ambushed the Honda CEO out on his run this morning, and he basically confirmed it too (though lots of specifics are still TBC).

Interestingly, the Japanese government seems to have played a behind-the-scenes role here, and has openly floated a possible Honda-Nissan merger since 2020. Why?

For a range of tech, commercial, and geopolitical reasons — our favourite Venn diagram.

First, on the tech front, Tokyo has been open about where it sees the world’s auto-industry headed: just last month, it set a target (and offered help) for its companies to gain 30% of the ‘software-defined vehicle’ market by 2030 — they see the future not so much in terms of a vehicle’s brawn (electric vs gas), but more in its brains.

Second, on the commercial front, closing the tech gap on AI, automation, and cloud to compete in a smart future requires massive investments now — and that’s tough for smaller players. So the merged automaker, with rumours of Mitsubishi joining too, would be the world’s third-largest automaker.

Third, on the geopolitical front, governments are worried about their industrial bases getting eroded by state-backed competition from China, which just overtook Japan as the world’s top vehicle exporter after sextupling sales in five years. That spooks the West not just for jobs or revenue reasons, but because an industrial base is also what you need in the event of a war: in WWII, Cadillac switched to make tanks, GM made bombers, Oldsmobile made bullets, and so on (ditto for BMW in Germany, Mitsubishi in Japan).

So… will this possible merger work?

The market’s response hints at the challenges ahead: Honda shares sagged, while Nissan soared 24%. That’s because, while both automakers have challenges, Intriguers might recall only weeks ago that folks in Asia were googling “Nissan collapse”, after an anonymous executive warned the firm might only have 12-14 months to live.

So why would the stronger Honda — long preferring to go it alone — now change course and do this deal? We can think of three main reasons:

  • a) It’s bending to the reality that bigger is better in this auto race

  • b) While Honda has been late to the EV game, Nissan was Japan’s EV pioneer (remember the ‘Leaf’?), and

  • c) Nissan has a big manufacturing footprint in the US, which is enticing for any foreign player looking for local options ahead of Trump 2.0 tariffs (even for an established manufacturer in the US like Honda).

But this won’t be easy: there are fears of political backlash in Japan given the likely job losses from a merger (though they’d be worse if Nissan collapsed). And this joint push into the future of smart cars comes just as EV sales ease: early adopters already adopted, cash-strapped capitals are rolling-back incentives, and weary consumers are hitting pause.

So this is going to be one heck of a joyride.

INTRIGUE’S TAKE

One of the things we’re learning about a smart car future is that it’s easier for ‘smart’ to learn cars (Tesla, BYD, Waymo) than it is for cars to learn ‘smart’ (GM just pulled the plug on its self-driving start-up, following a similar move by Ford and VW in 2022).

The other thing we’re (re)learning is that companies can be similar to countries in some intriguing ways, like how they make and break alliances to survive: Nissan is now running to Honda after a long-running but messy partnership with Renault.

Also worth noting:

  • The possible Nissan-Honda-Mitsubishi merger, which builds on announcements in March and August, would basically consolidate Japan’s industry into a duopoly (Toyota has tie-ups with Subaru, Suzuki, and Mazda).

MEANWHILE, ELSEWHERE…

  1. 🇰🇵 North Korea: The US says it’s now seen “indications” that North Korean soldiers suffered their first casualties while supporting Russia’s war against Ukraine last week. North Korea deployed as many as 10,000 troops to Russia earlier this year as part of a mutual security pledge.  

  2. 🇬🇱 Greenland: Authorities in Greenland have released Canadian-American anti-whaling activist Paul Watson after initially arresting him over Japanese allegations that he damaged a whaling ship in 2010. Greenland is an autonomous territory of Denmark, which has no extradition treaty with Japan and made the final call not to hand Watson over.

  3. 🇦🇺 Australia: The UK is hoping to convince Australia to join its Global Combat Air Programme to co-develop a supersonic fighter with Japan and Italy by 2035, according to the WSJ. Australia’s participation could help bring down costs and expand the jet’s future clientele. 

  4. 🇦🇷 Argentina: The Italian government has granted Argentine President Javier Milei Italian citizenship (on account of his three Italian grandparents) during a visit to Rome to meet his counterpart Giorgia Meloni. The reports have irked those opposed to Italy’s ancestry-focused citizenship rules.

  5. 🇳🇬 Nigeria: Authorities have arrested nearly 800 people allegedly involved in an online romance scam ring based in Lagos. The accused — including nationals of Nigeria, China, and the Philippines — allegedly targeted potential victims in Europe and the Americas.

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EXTRA INTRIGUE

This week in geopolitics x pop culture:

  • A 🇧🇷 Brazilian judge has ordered Adele to pull her song ‘Million Years Ago’ from streaming services amid a plagiarism court case. Brazil is a signatory to the 1886 Berne Convention protecting intellectual property.

  • 🏴󠁧󠁢󠁳󠁣󠁴󠁿 Scotland will ban popular messaging apps like WhatsApp on government devices after an inquiry found it’s too easy to delete messages (aka evidence).

  • And the 🇫🇷 French company behind the latest Paddington Bear film (a symbol of Britishness abroad) has pledged to resist pressure to Americanise the stuffed animal to maximise box office results.

STUNT OF THE DAY

Florentine Mayor Sara Funaro, pictured in the left panel. Credits: Sara Funaro via Instagram.

Nobody’s getting into the festive cheer more than the mayor of Florence, Sara Funaro.

She channelled her inner Sigourney over the weekend, repelling down the 13th century town hall while rocking a red and green elf outfit. Once firmly on the ground, she handed out candy to the gawking pre-positioned children as part of a Christmas PR stunt (literally).

Funaro now joins a long tradition of eye-catching political Christmas moves, like Boris Johnson’s 2023 Christmas card in a full Santa suit perched atop a ladder, or this pic of Germany’s Angela Merkel ironing her gift wrapping paper for some reason.

Yesterday’s poll: How long do you think Trudeau has left?
(since yesterday’s briefing, Trudeau has reportedly acknowledged current difficulties but hasn’t yet indicated what he plans to do)

⬜️⬜️⬜️⬜️⬜️⬜️ 👋 3 hours (4%)

🟨⬜️⬜️⬜️⬜️⬜️ 😮 3 days (11%)

🟨🟨🟨⬜️⬜️⬜️ 😬 3 weeks (26%)

🟩🟩🟩🟩🟩🟩 😒 3 months (49%)

⬜️⬜️⬜️⬜️⬜️⬜️ 😍 3 years (6%)

⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write us!) (3%)

Your two cents:

  • 😒 R.J.C: “Trudeau won't resign on his own accord and there is no mechanism in the Canadian parliamentary system to remove a party leader outside the ballot box. Opposition parties will have to wait until at least March, the next opportunity to bring forward a non-confidence motion. That said, only one of the three opposition parties has the cash to run a campaign."

  • ✍️ R.D: “3 lettuces. Seriously though, at this stage nobody with any ambition for a future in politics will want to replace him even if he did resign.”

  • 😬 G.H: “As someone IN THE KNOW, ahem, to a small degree, and having been involved in party stuff since ‘85, I personally think he will announce retirement from politics after New Year’s. This gives the party time to have a convention in spring, slap someone like Carney in as new leader, run up to election, fail miserably and blame it on the new guy.”

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