According to a report from Japanese business journal Nikkei, unnamed sources claim that the proposed merger between Nissan and Honda is no longer moving forward. The sources, who requested anonymity, state that Nissan plans to withdraw from its memorandum of understanding with Honda.
Nissan-Honda merger key issue
The sticking point appears to be Honda’s proposal to take a stake in Nissan and make it a subsidiary rather than proceeding with a full merger. It was initially reported they planned to merge as equals which would have formed the world’s third-largest automaker, behind Toyota and Volkswagen.
Speculation suggests the Japanese government may have played a role in encouraging the deal as a strategic countermeasure against the rapidly growing Chinese auto industry. Some analysts believe Honda’s subsidiary proposal was a calculated move to prompt Nissan’s rejection and end merger discussions. Nikkei reports that Nissan insisted on an equal partnership and refused to become a Honda subsidiary.
Both companies have issued responses to the Nikkei report. A Nissan spokesperson stated, “The article is not based on information announced by Nissan. We aim to finalize our direction by mid-February and will announce it at that time.” Honda similarly confirmed that discussions are ongoing, saying, “We are currently in the process of discussing various matters, including the facts reported in the media.”
While the merger appears up in the air, Nissan and Honda remain in talks about potential collaboration in specific areas, including electric vehicle development. The two automakers initially signed a memorandum of understanding for joint EV development in March 2024. Merger talks formally began in December.
The Honda CEO had also suggested they could build new vehicles using existing technology like a hybrid Nissan Frontier.
Mitsubishi has declined to be part of the merger.
Our take
It is too early to declare the merger off, but this kind of infighting already doesn’t bode well.
