Honda-Nissan Merger Talks Collapse Over Disagreements

Merger negotiations between Japanese car manufacturers Honda and Nissan have broken down after the two companies failed to agree on the terms of a multi-billion-dollar deal. The proposed merger, which also included junior partner Mitsubishi, aimed to strengthen all 3 brands’ position against growing competition, particularly from Chinese automakers.

If the deal had gone through, the combined group would have been valued at $60 billion (£48 billion), making it the world’s fourth-largest automaker by vehicle sales, behind Toyota, Volkswagen, and Hyundai. Despite the collapse of merger talks, both companies have stated they will continue their partnership in electric vehicle (EV) development.

Nissan’s Problems

For Nissan, the merger was seen as a potential lifeline amid years of declining sales and leadership disruption. The company, which was once Japan’s second-largest automaker, has faced big challenges since the arrest of its former chairman Carlos Ghosn in 2018. Ghosn, who was accused of financial misconduct, a charge he denies, fled Japan and now lives in Lebanon.

Honda entered the talks from a stronger position, as a globally popular brand that sells more vehicles than Nissan. The company’s CEO, Toshihiro Mibe, had previously stated that any merger would be dependent on Nissan completing its recovery.

Ultimately, disagreements over Nissan’s role in the merger, whether as an equal partner or a subsidiary, proved to be a dealbreaker.

More Struggles To Come

As well as the internal disagreements going on with both brands, Honda and Nissan face challenges coming from outside the business. The U.S. market could soon impose tariffs on their vehicles, adding further pressure. It’s also worth noting that Chinese manufacturers like BYD are rapidly gaining dominance in the EV sector, making it harder for traditional manufacturers to compete.

The failed merger discussions were originally driven by the need to respond to this increasing competition. Honda’s CEO warned that without significant strategic changes, Japanese car manufacturers could struggle to keep up with industry shifts by 2030.

What’s Next for Nissan?

With Honda out of the picture, Nissan’s future remains questionable. That being said, potential new investors have already emerged. Taiwanese tech giant Foxconn, known for manufacturing advanced computer chips, has expressed interest in acquiring Nissan shares to explore possible collaboration.

It will be interesting to see what the future holds for Nissan.