0740 GMT - Investors could be concerned about Nissan's future as its board is planning to reject Honda's merger terms, Morningstar analyst Vincent Sun says. Nissan would face pressure surviving amid stiff competition in the U.S. and China, especially as it has a larger risk exposure to U.S. tariffs on Mexico than Honda and Toyota, the analyst says. However, even if the merger goes through, that wouldn't solve the challenges the two companies face. Both carmakers lack compelling EV offerings, and the combined entity would need to build a new EV model pipeline, he says. The two could benefit from larger scale and cost synergy, but that would take time to realize, Sun says. In any case, Nissan would find it difficult to "play a smaller role in the new entity rather than standing on an equal footing with Honda," he adds. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

February 05, 2025 02:40 ET (07:40 GMT)

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