Nissan-Honda Break Up Imminent: Details!
The Japanese automotive giants Honda and Nissan could soon be calling off their merger, which was announced just seven weeks ago. It has been reported that Nissan has rejected Honda’s proposal to make their brand a subsidiary of Honda. Most likely, this means that the merger between the two brands will not take place. Nissan has stated that it is almost impossible to meet the conditions proposed by Honda.
Honda and Nissan Merger Breakup
As per reports, Honda had proposed to Nissan a plan under which Nissan would become a subsidiary of their brand. This would have provided them with complete control of Nissan. However, this particular proposal has been rejected by Nissan, as they are concerned about losing autonomy over their brand.
A Nissan executive stated, “We hope that the talks will not break down, but [a business merger] is tough.” Meanwhile, an official from Honda has stated, “Nissan lacks a sense of urgency. We don’t think Honda can afford to negotiate with them any longer.”
When Did Honda and Nissan Merger Talks Begin?
Back in November 2024, a press conference was held by Nissan, Honda, and Mitsubishi Motors. It was then stated that Nissan and Honda had signed a Memorandum of Understanding (MOU) to start discussions of a merger. This merger aimed to maintain global competitiveness and deliver more attractive products. However, its main aim was to save Nissan from the brink of bankruptcy.
At the time, it was announced that a final merger was expected to take place by June 2025 and would be completed in 2026. However, as Nissan has now rejected the proposal offered by Honda, the merger will most likely not take place. Back in November, it was also announced that Nissan would cut 9,000 jobs worldwide and reduce its production capacity by 20 percent.
However, Honda stated that these measures were too slow and ineffective. Following this, it was noted that Honda wanted quick and decisive actions from Nissan. However, as Nissan was being very cautious, it led to growing frustration for Honda. It was also reported that Honda saw Nissan’s reluctance to accept restructuring as a major obstacle.
During these merger talks, Nissan has been fearing that it will lose its independence if it accepts the proposal by Honda. It has also been added that its ability to make decisions will be gone if the Honda proposal is accepted. Now, it seems most likely that Honda will not be offering Nissan any new proposals, which will lead to an outright breakup of the two Japanese brands.
Mitsubishi Motors to Stay Out of the Merger
During the last press conference, Mitsubishi Motors, which is Nissan’s largest shareholder, had initially considered joining the merger talks. However, it has now been reported that Mitsubishi Motors will remain independent until Nissan and Honda reach a final decision.
Nissan Struggles
Over the last few years, Nissan has been struggling due to weak global sales. It has been continuously losing its market share in the USA, China, and Europe. Its profit margins have also been shrinking, and post-COVID pandemic, the company has not been able to recover from its losses. Additionally, the brand has been cutting jobs across the globe, which is leading it into a spiral.
Apart from these issues, the most important problem with Nissan is its outdated model lineup—not only in India but across the globe. Nissan models are seen as outdated vehicles. Additionally, the company has not been able to adapt to the EV revolution, and its lack of competitive EV cars has also led to its decline. Most likely, if this merger gets completely called off, Nissan could end up in deep trouble.