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BREAKING NEWS

Hitachi auto unit, Honda-affiliated suppliers to merge

Hitachi auto unit, Honda-affiliated suppliers to merge
A photographer take pictures of Honda and Hitachi Automotive logos after the companies held a joint news conference in Tokyo, Japan, February 7, 2017. REUTERS/Kim Kyung-Hoon/Files -
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Kim Kyung Hoon(Reuters)
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TOKYO (Reuters) – Hitachi Ltd <6501.T> on Wednesday said its vehicle components operations would merge with three Honda Motor Co-affiliated suppliers, creating Japan’s third-biggest auto-parts supplier by sales, to better compete to develop next-generation car parts.

The move comes as carmakers struggle to adapt to technological change including the rise of electric vehicles and self-driving systems.

Hitachi said it would take a 66.6% stake in the surviving company formed in the merger with engine components maker Keihin Corp <7251.T>, steering systems maker Showa Corp <7274.T> and brake components producer Nissin Kogyo Co <7230.T>. It would keep the Hitachi Automotive Systems’ name.

Honda <7267.T> will take a 33.4% stake in the company, Hitachi said in a statement.

The Yomiuri newspaper reported earlier on Wednesday that the companies were considering the merger. Shares in the three Honda suppliers each ended the day more than 20% higher, surging after an earlier trade suspension was lifted.

(Reporting by Miwa Sasaki, Chris Gallagher, Makiko Yamazaki, Maki Shiraki; Editing by Stephen Coates and Christian Schmollinger)

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