If the proposed merger between automotive giants Honda and Nissan comes to fruition, the combined forces will represent the third-largest automaker by sales. Japanese automakers are responding to rising competition from China’s entrée into the electric vehicle market, where manufacturers have undercut traditional car prices by approximately one-third.
Both companies have a significant manufacturing and R&D footprint in the US, and according to MSN’s reporting, the merger is predicted to affect manufacturing jobs in the US. Honda has more than 23,000 employees at 12 factories across the US, and Nissan has approximately 15,000 workers at three plants. Nissan Motors has announced it will cut 9,000 jobs and 20% of its global manufacturing capacity.
The incoming administration will also influence the future of the automotive industry and the American workers supporting it. While significant tariffs may be imposed on countries exporting vehicles to the US, there may also be incentives for foreign companies to manufacture their vehicles on US soil. This could lead to job growth in the sector.
Additionally, the potential introduction of tariffs may fuel a pivot from an international to a domestic supply chain to keep margins healthy. These changes could stimulate job growth, particularly in verticals related to the automotive industry, such as battery production and software development.
The industry’s 2025 outlook will also be shaped by the possible repeal of the EV Tax Credit, which was introduced as part of the Inflation Reduction Act in 2022. In anticipation of a repeal, there has been speculation that early 2025 is the best time to purchase an electric vehicle to take advantage of the tax credit while it is still in place. This could spur the need for sales, finance, and marketing professionals, at least in the short term.
US automakers are paying close attention to this potentially changing landscape. Ford and General Motors have donated $1M and several vehicles to the 2025 inauguration and remain optimistic that the new administration will be open to supporting their continued success.
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