The proposed Honda-Nissan merger is on life support, with Nissan reportedly looking for a new partner following a breakdown in negotiations between the two brands.
As reported this week, insiders have claimed the relationship between the Japanese carmakers has soured, as Nissan didn’t want to become a subsidiary of Honda, but rather an equal partner.
This is despite Nissan being in a precarious financial position, with industry experts arguing it has less to offer the partnership than Honda.
Overnight, Bloomberg reported word from insiders that Nissan is now actively looking for a new company to partner with, as it’s now unlikely to merge and form a joint holding company with Honda.
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According to those who spoke to the publication, Nissan is looking for a “partner that would ideally be from the technology sector and US-based”, in a bid to recapture some of its lost sales in the important North American market.
Both Nissan and Honda have said during the past week that they are continuing negotiations despite multiple reports from insiders that the merger is effectively dead in the water.
However, recent comments made by sources to Reuters suggested merger talks could potentially restart.
The carmakers had previously announced they would develop a framework for the proposed merger by mid-February, before coming to a definitive agreement – laying out the specifics of the deal, including share transfers – by June 2025 and merging in mid-2026.
Nissan is still currently a part of the Renault-Nissan-Mitsubishi Alliance, founded in 1999 between Renault and Nissan before Mitsubishi joined in 2016.
Renault only recently reduced its stake in Nissan, from 43.4 per cent to the current 35.7 per cent holding.
In an additional report, Reuters was told by a spokesperson for Renault that it “would ‘vigorously’ defend the interests of the group and its stakeholders.”
While Mitsubishi was due to decide on whether it’s joining the merger by the end of January 2025, a report last month by The Japan News, citing unidentified sources, said the brand is making arrangements to exist outside of the Honda-Nissan merger.
Nissan is Mitsubishi’s largest shareholder but recently sold off an undisclosed portion of its 34 per cent stake.
The news of the Honda-Nissan merger likely being called off comes a handful of months after Nissan said it was entering “emergency mode” with plans to reduce production capacity by 20 per cent and fire 9000 workers.
This was followed by The Financial Times reporting a senior official close to the carmaker said “we have 12 or 14 months to survive”.
The proposed merger would have made the Japanese alliance the world’s third-largest carmaker, based on 2024 production volumes, behind market leader Toyota (including Lexus, Daihatsu and Hino) and the Volkswagen Group.
In 2024, Honda produced 3,733,602 vehicles (down 11.9 per cent), while 3,144,470 vehicles (down 8.7 per cent) rolled off Nissan production lines, totalling approximately 6.88 million vehicles.
Mitsubishi meanwhile produced 944,708 vehicles, 7.7 per cent fewer than the year prior.
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