Honda Motor Co. absorbing Nissan Motor Co. could give the two struggling Japanese brands the scale they need to take on China’s BYD Co., sales figures released Wednesday show.

Honda, which earlier this week sketched out plans for a deal that amounts to an acquisition of Nissan, sold 3.43 million cars globally in the first 11 months of 2024. Nissan said it sold just over 3 million.

China’s biggest automaker BYD sold 3.76 million vehicles over the same period — a clear illustration of how Nissan and Honda are weak alone but, together, might have a fighting chance.

Honda and Nissan are both having trouble contending with ascendant domestic automakers in China, which surpassed Japan as the world’s largest car exporter last year and is set to pull further ahead in 2025.

The duo have had to pare back staffing and production in China, while Mitsubishi Motors Corp., which may also participate in the Honda-Nissan combination, has all but pulled out of the world’s biggest car market.

Honda’s sales in China fell 28% in November versus the same month of 2023 while output slumped 38% year-on-year.

Any spending Honda may need to do to catch up could be impacted by its ¥1.1 trillion ($7 billion) buyback, S&P Global Inc. said in a report. “Large-scale share repurchases do not contribute to strengthening the future business base and result in capital outflows,” the ratings company noted.

Honda announced the buyback on Monday. The upper limit amounts to 24% of issued shares. Stock in Honda closed up 0.8% on Wednesday.

Nissan’s China sales dropped 15.1% in November while local production sank 26%.

Globally, Honda’s sales last month slipped 6.7% to 324,504 units while output tumbled 20.4%. Nissan’s worldwide sales declined 1.3% year-on-year in November to 278,763 vehicles while production took a bigger hit at 14.3%.

Together, Honda and Nissan would also pose more of a threat to Toyota Motor Corp., which is the world’s biggest automaker followed by Germany’s Volkswagen AG. Its global sales plateaued in November as lackluster demand coalesced with a pause in production at two of its plants.

Toyota’s sales — including that of subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. — totaled 984,348 units last month, the Japanese automaker said Wednesday, down 0.2% versus November 2023. Production declined 9.4% year-on-year to 966,921 units.

Toyota’s business is also feeling the strain of locally made electric vehicles in China as well as intense competition over hybrid gasoline-electric cars in the US. Like Honda and Nissan, its hold on markets across Southeast Asia is being steadily eroded by Chinese competitors too.

More broadly, weaker global demand this year for new cars was compounded by output cuts at Toyota caused by regulatory probes and recalls in Japan and abroad. Production between January and November fell 7.3% in Japan and 15.2% in China for Toyota, again underscoring the rising competition in Asia’s biggest economy.

Toyota’s production in China, or vehicles off the delivery line as opposed to end-consumer sales, declined 1.6% year-on-year last month.

However, investors shrugged off Toyota’s stagnating sales after a Nikkei report that the company plans to double its return-on-equity target to 20%. Toyota’s return-on-equity in recent years has ranged by 9% to a little under 16%, Nikkei said.

Shares in Toyota gained as much as 4.4%. A spokesperson said in a statement that Toyota “doesn’t have an explicit target or deadline” for return-on-equity.

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