- Discussions about a planned merger of Honda and Nissan appear to be off the table
- Unnamed sources say Nissan objected to Honda’s plan to make it a subsidiary rather than an equal partner
- But not all hope is lost, and discussions might start again in the near future
After we reported last December that Honda and Nissan were talking about merging, it looks like the deal is off. It appears that Nissan’s board of directors is backing its company out of it, reportedly because Honda planned to treat Nissan as a subsidiary, rather than a merger of equals. The two companies had signed a memorandum of understanding (MOU) in December to discuss the possibility. Now, Japanese news agencies are reporting that Nissan intends to end the merger discussions, although it’s noted their sources were not named due to them not being authorized to speak to media about it.
The sources also reported there could be the possibility of the two automakers going back to the table to start a new discussion from scratch, but none of that has been confirmed. If the original merger had gone through, it was expected that an announcement would be made in June 2025.
Initially, reports were that the two automakers would be operate under a holding company, and it could potentially also include Mitsubishi. Both Nissan and Mitsubishi are members of the Renault-Nissan-Mitsubishi alliance, but while Nissan had held 34% of Mitsubishi, that automaker bought back 10% of that stock in November 2024, although the two continued to collaborate.
Under the proposed merger, Nissan and Honda planned to share their platforms for gasoline and electrified vehicles, including hybrids and plug-in hybrids (PHEVs) as well as full battery-electric models. While Nissan currently makes the all-electric Leaf and Ariya, Honda’s sole offering in North America is the Prologue, based on General Motors’ Ultium platform and with engineering from the Chevrolet Blazer EV.
Honda and General Motors had initially agreed to a US$5-billion plan in 2023 to co-develop electric vehicles, but that fell through and Honda will now make its own EVs, called “0 Series.” If all goes according to plan, that undertaking will include an EV production plant, a battery plant, and a joint venture for battery materials—all of them in Ontario.
Apparently, one of the goals of the planned merger was for both companies to strengthen themselves in the EV market against Tesla, along with lower-cost EVs from China-based automakers. In 2023, Nissan sold 140,000 EVs globally, while Honda sold 19,000; but Tesla sold 1.8 million, and Chinese automaker BYD sold 1.57 million. In 2024, the Tesla Model Y was the top-selling vehicle worldwide.
If a merger had – or possibly might still – go through, the Japanese domestic market would essentially be divided into two automakers, Toyota Motor Group and a Honda-Nissan-Mitsubishi alliance. Toyota is the largest automaker in Japan, followed by Honda and Nissan. Reports are that Nissan, which has been experiencing a downturn in sales, plans to cut 20% of its global capacity and shed 9,000 employees.
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