It’s all over - Honda-Nissan merger is officially dead in the water

Well there it is, statements issued by the press office of both Honda Motor Co. and Nissan Motor Co. confirm that both parties are set to scrap their plan to merge into what would have become the world's 3rd-largest auto group by volume as negotiations collapsed less than two months after its announcement.

Prior to this, Honda and Nissan initially said they would unveil the details of their tie-up plan by the end of January but pushed it back to mid-February. Though the timing is on schedule, it has unfortunately resulted in all parties walking away from the table.

Plenty of unconfirmed insider revelations shed light on tensions within the highest offices of both automakers about control over the would-be unit, with reports of Honda, being worth about 3x more than Nissan and having a much larger influence on the global car market, taking majority control of key business sectors not sitting sit well with Nissan’s top brass.

In December, Honda and Nissan, Japan’s second and third largest automakers, announced plans to finalize their merger negotiations by June 2025 and establish a holding company by 2026 to oversee both brands, with Mitsubishi initially included in the discussions.

Following recent board meetings, both companies are set to release their financial results for the April-December period later this Thursday. The merger aimed to reduce costs through joint efforts in developing electric vehicles and software, enabling them to compete more effectively with global giants like Tesla Inc. from the U.S. and China’s BYD Co.

At the December press conference announcing the merger talks, Honda emphasized that Nissan, which has faced financial struggles, would need to strengthen its turnaround efforts for the deal to proceed. Back then, Mitsubishi was also part of the initial discussions, aiming to form a historic alliance within Japan’s automotive industry.

In November, Nissan committed to cutting approximately 9,000 jobs worldwide and reducing its global production capacity by 20 percent to lower costs. However, Honda remained unconvinced that Nissan’s recovery plan would ensure a successful turnaround, according to sources familiar with the matter.

By January, Mitsubishi officially exited the negotiations, citing an inability to find clear synergies that aligned with its core strengths, and more recently, Honda proposed making Nissan its subsidiary, expressing concerns that Nissan’s slow restructuring efforts could hinder the merger’s future success.

However, as mentioned, this proposal met strong opposition from Nissan’s board, ultimately leading to the collapse of the merger plan, according to sources.