- Nissan and Honda are “advancing various discussions” regarding proposed merger
- Honda reportedly proposed to make Nissan a subsidiary
- Merger is seen as potential lifeline for Nissan, would create one of world’s largest automakers
The anticipated merger between Honda and Nissan announced last December, may be encountering significant challenges that, according to reports, could potentially lead to its cancellation.
Initially, both automakers planned to finalize their decision by the end of January, but the deadline has been pushed back to mid-February. New tariff threats by the Trump administration are also likely to be weighing on the deliberations.
Now a series of reports citing insiders—and potentially part of the give-and-take of negotiation—indicate that Nissan is reconsidering its participation in the merger.
Citing several sources, Reuters reported on Wednesday that Nissan’s management expressed concerns over Honda’s proposal to make Nissan a subsidiary, a move that could diminish Nissan’s decision-making authority within the partnership. That report also appears to imply that negotiations have halted or that Nissan has withdrawn while it retains the option to restart negotiations.
Nissan, after that report, has issued a statement confirming that discussions have not ended. “Based on the memorandum of understanding signed on December 23 last year, Honda and our company are in the stage of advancing various discussions, including the contents of the report, and we plan to establish a direction and make an announcement around mid-February,”
Honda had not yet at the time of writing issued its own equivalent statement. Japan’s Asahi Shimbun also reported on Wednesday, perhaps as part of these “discussions,” that Honda executives are frustrated with Nissan’s slow progress in both the merger discussions and the implementation of a restructuring plan. This plan includes the reduction of 9,000 jobs and a 20% decrease in production capacity.
Unlike Honda, Nissan has been struggling with declining sales, particularly in the U.S. and China, raising uncertainty about its future without the merger. Without a clear path forward, the merger has been seen as a potential lifeline. The Financial Times in its own report on Wednesday highlighted that Nissan’s recent poor financial performance has caused its market capitalization to shrink to just one-fifth of Honda’s, altering the balance of power in the negotiations.
Mitsubishi, which is already partially owned by Nissan, was invited to join the merger. However, reports from January suggested that Mitsubishi preferred to stay out of the merger, citing its smaller size and concerns over losing independence within the combined entity.
Even without the merger, Honda and Nissan may deepen their collaboration. The automakers are already partnered in some areas. Honda and Nissan have been collaborating on EV and software development since early last year, and Mitsubishi joined the partnership last summer. Nissan and Mitsubishi also already share vehicle platforms and technology via their existing alliance, which also includes Renault. Mitsubishi has also collaborated with Honda in the past, most recently in battery leasing for EVs through a joint venture called Altna.
Combined sales of Honda and Nissan in 2023 totaled more than 8 million vehicles. That would make the merged automaker, estimated to have a value of around $58 billion, the third largest by sales volume after Toyota and the Volkswagen Group, which sold 11.2 million and 9.2 million vehicles in 2023, respectively.
