Report: Nissan-Honda Merger Will NOT Proceed

it looks like the proposed Nissan-Honda merger has reached a major roadblock following major disagreements from both sides.

The proposed Nissan-Honda merger, first announced back in Dec 2024, may NOT happen after all. Whilst neither firm have yet to confirm any decision, various reports online citing insiders close to the matter on both sides indicate that both firms have reached an impasse.

As a refresher, the merger between both Japanese automakers was allegedly mooted by Japan’s Ministry of Economy, Trade and Industry (METI). More accurately, said ministry had allegedly pushed Honda to help rescue ailing Nissan which, at one point, reportedly just had “months left”.

Had this merger went through, it would've created the world's third largest automaking group, and could've included MItsubishi Motors too.

Had the merger proceeded, it would’ve created the world’s third largest automaking group, and it could also have included Mitsubishi Motors joining in – the tri-diamond marque was present during the initial merger announcement, but maintained an “wait-and-see” policy.

Now, new reports surfacing out of Japan indicate that both Honda and Nissan have reached an impasse impossible to overcome. Firstly, Nissan execs are reportedly set to formally reject a plan from Honda that would’ve seen Nissan positioned as a subsidiary – not an equal partner.

Said plan would’ve seen Honda potentially buy up Nissan shares and turn it into a subsidiary. This was obviously not going to work given Nissan’s desire to maintain its autonomy.

One major disagreement stemmed from a proposal for Nissan to serve as a subsidiary of Honda. This ultimately did not sit well with Nissan execs who seek to keep the marque's autonomy.

Secondly, it seems Honda isn’t convinced of Nissan’s proposed turnaround plans. In the weeks following the initial announcement, Honda had prompted several strict financial targets, which included Nissan to triple its profits and buying back shares from Renault.

It was generally understood that that Nissan needed to generate roughly Nissan will need to generate roughly ¥400 billion (approx. US$2.6 billion) by fiscal year 2026. This would be difficult given that Nissan’s operating profits recently fell from US$2.3 billon to a measly US$225 million.

Moreover, insiders reportedly say that Honda remains unconvinced of Nissan's proposed turnaround plans, and it is asking for more significant changes.

Also, despite Nissan’s recently announced plans to slash up to 9,000 jobs globally and lower its global production capacity by 20%, Honda is demanding more significant changes be made.  

Adding to its difficulties, Nissan is also under threat from tariffs imposed by returning US President Donald Trump – Nissan builds the bulk of its volume-selling models for the American market across the border in Mexico, and these could be hit with 25% tariffs.

For now, no official announcement has been made yet. Clearly, unless a solution appeasing both sides arises, it doesn’t seem like this merger will go through for now. We’ll have more once either firm officially announces more details…