The proposed merger between Honda and Nissan, once considered one of the most significant potential shifts in the automotive industry since the formation of Stellantis in 2021, has officially been called off due to disagreements over management structure.
According to reports from Kyodo, Honda had suggested that Nissan become a subsidiary to streamline decision-making processes. However, Nissan, struggling with sluggish sales in key markets, insisted on forming a holding company to maintain its independence.
“We expected that (accepting) our proposal would be an extremely tough judgement for Nissan,” said Honda CEO Toshihiro Mibe.
He explained that Honda had proposed taking control of Nissan to avoid delays in decision-making, particularly when facing complex challenges.
Mibe dismissed the notion of a hostile takeover. “We have never thought about it and have no plan to do so,” he stated.
Nissan CEO Makoto Uchida, on the other hand, rejected Honda’s offer due to concerns over the company’s future autonomy. “We couldn’t be confident if our autonomy would be ensured,” Uchida remarked.
Despite the breakdown in merger talks, Nissan intends to continue seeking strategic partnerships while exploring potential collaborations with Honda and Mitsubishi in specific areas.
Both automakers are striving to cut costs by sharing the financial burden of developing electric vehicles (EVs) and software-driven technologies, aiming to remain competitive against global players like U.S.-based Tesla Inc. and China’s BYD Co.
Earlier discussions had highlighted the growing pressure from Chinese automakers and new market entrants, which have disrupted the industry landscape.
“The rise of Chinese automakers and new players has changed the car industry quite a lot. We have to build up capabilities to fight with them by 2030, otherwise we’ll be beaten,” Mibe had previously warned.
A report by S&P Global Mobility projected that the global EV market would grow by nearly 30% annually, with sales reaching 89.6 million units by 2025. Meanwhile, the autonomous vehicle industry is expected to hit $448.6 billion by 2035.
Honda had seen Nissan as a valuable partner in mitigating rising costs associated with EV and autonomous vehicle development. “We have significant labor and development costs, and if there are operations we could share, that would be good for us,” noted Honda Executive Vice President Noriya Kaihara.
At the time, Honda had also shown interest in Nissan’s large SUV models, such as the Armada and Pathfinder, considering them potential candidates for hybrid adaptation. “Our hybrid technology can be customized for larger vehicles,” explained Toshihiro Akiwa, Head of Honda’s Electric Vehicle Development Center.
However, geopolitical uncertainties, including potential import tariffs introduced by U.S. President Donald Trump, remained a key concern. “We must remain flexible in case EV subsidies are withdrawn,” Kaihara had emphasized.
Despite these setbacks, Honda remains committed to electrification. “In the long term, electric vehicles are the future,” Mibe affirmed.
While the merger may not be moving forward, the evolving landscape of the automotive industry ensures that both companies will continue seeking ways to adapt and compete in an increasingly challenging market.
- Honda and Nissan merger officially called off.
- Disagreements over management structure led to the decision.
- Honda suggested Nissan become a subsidiary.
- Honda CEO Toshihiro Mibe noted the difficulties in their proposal.
- Nissan preferred a holding company to keep independence.
- Nissan CEO Makoto Uchida expressed concerns over future autonomy.
- Uchida rejected Honda’s offer.
- Nissan will seek strategic partnerships.
- Potential collaborations with Honda and Mitsubishi in specific areas.
- Both companies aim to cut costs by sharing development expenses.
- Focus on electric vehicles (EVs) and software technologies.
- Need to compete against Tesla Inc. and BYD Co.
- Global EV market forecasted to grow nearly 30% annually.
- Autonomous vehicle industry expected to reach $448.6 billion by 2035.
- Interest in Nissan’s large SUV models for hybrid adaptation.
- Acknowledgment of rising costs associated with EV development.
- Potential import tariffs and EV subsidies noted as concerns.
- Honda remains focused on electric vehicles as the future of mobility.
Proposed Merger Overview
Honda’s Proposal
Nissan’s Position
Future Collaborations
Industry Competition
Market Trends
Honda’s Development Interests
Geopolitical Concerns
Commitment to Electrification
