(Bloomberg) -- Japanese automaker shares climbed after news of a potential merger between Honda Motor Co. and Nissan Motor Co. stoked speculation that more deals are on the horizon for the industry.
While Nissan led gains in the sector with a jump of as much as 24%, shares of Mazda Motor Corp. and Hino Motors Ltd. both advanced more than 6% at one point. Subaru Corp., Toyota Motor Corp. and Suzuki Motor Corp. also rose, even as the wider Japanese market fell.
Mitsubishi Motors, which is said to be part of the merger talks, saw its shares soar about 20%.
Hopes that a tie-up could rescue Nissan’s faltering business are boosting optimism for Japan’s automakers, which have struggled to keep pace with Chinese rivals in the electric vehicle race.
Half of the top 10 performers on the Nikkei 225 gauge were auto-related companies on Wednesday, and carmakers gave the biggest boost to the broader Topix index.
“Integration seems to be opening up as a way out of disaster for automakers,” said Tatsuo Yoshida, a senior analyst at Bloomberg Intelligence. Mazda, Mitsubishi and Hino have all neared crisis point in recent years, he added.
“If even Nissan can escape crisis, people think others may be able to, too,” Yoshida said.
The Nissan-Honda talks can be viewed “in anticipation of the full-scale transformation of the auto industry,” wrote Arifumi Yoshida, head of pan-Asia autos at Citigroup Global Markets Japan Inc., in a note.
Honda is considering several options including a merger, capital tie-up or the establishment of a holding company, Executive Vice President Shinji Aoyama said Wednesday, following reports overnight of talks between the companies.
In contrast to its peers, Honda’s shares fell as much as 3.6% on the news.
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