“The Auto Alliance Aborted: Honda and Nissan Scrap Merger Plans”

According to Motor1, Honda and Nissan signed a Memorandum of Understanding on December 23, 2024, to discuss a potential merger, forming a new parent company to combine two of Japan’s leading automobile manufacturers, with operations expected to begin as early as 2026.

However, shortly after the signing of the aforementioned memorandum, multiple sources revealed signs indicating that the deal would certainly fall through. Now, both Honda and Nissan have confirmed that the merger has been called off.

Specifically, Honda and Nissan issued identical press releases, stating that the merger talks have concluded. Both companies also confirmed that the possibility of making Nissan a subsidiary of Honda was one of several options analyzed during the discussions.

“Honda proposed changing the structure from establishing a joint parent company to a structure in which Honda would be the parent company and Nissan the subsidiary through an exchange of shares,” the press release stated.

The lack of a handshake between Honda and Nissan means the creation of the world’s third-largest automobile manufacturer by sales volume isn’t happening. Photo: Reuters.

According to Motor1, a separate memorandum of understanding signed by Honda, Nissan, and Mitsubishi on December 23, 2024, has also been nullified. This document pertained to how Mitsubishi could be involved in the Honda-Nissan merger.

While the three Japanese automakers still intend to collaborate on electric vehicle production, there will be no merger.

Numerous behind-the-scenes details emerged while the merger negotiations were ongoing. In addition to wanting to make Nissan a subsidiary, Honda appeared reluctant to involve Renault and requested that Nissan buy back the shares held by the French automaker.

Mitsubishi was also accused of backing out of becoming the third member of the merger, opting instead to remain independent.

Reuters quoted inside sources as saying that the deal fell apart mainly because Nissan wanted to be treated almost equally in the merger talks, while Honda wanted full decision-making authority. Honda was also reportedly dissatisfied with the pace of Nissan’s restructuring.

Both companies still intend to collaborate on electric vehicle production. Photo: Motor1.

Rumors suggest that Nissan is still seeking partners. Taiwan’s Foxconn, an electronics manufacturer, remains interested in a potential collaboration but does not want to acquire Nissan outright.

For its part, Nissan is pressing ahead with its restructuring plan, announced in November 2024. Nissan’s efforts include cutting 9,000 jobs, along with reducing its global production capacity by one-fifth.

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“Nissan’s future hangs in the balance. Without a well-thought-out strategy to boost sales and profit margins, the merger could very well fall apart, leaving the company vulnerable.”