Honda and Nissan last week announced they wouldn’t be pursuing a merger which would have seen the duo – along with Mitsubishi – become the world’s third-largest carmaker, saving Nissan from its financial woes.
While the deal was expected to almost certainly be off following the brands’ announcements, the Financial Times now reports Honda would still consider merging with Nissan – with one huge caveat.
According to at least one insider who spoke to the publication, Honda is only open to merging with Nissan if its CEO, Makoto Uchida, resigns.
Uchida-san is reportedly facing pressure from his own board as well as partner Renault after merger negotiations broke down.
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Makoto Uchida (left) and Toshihiro Mibe (right)
Nissan was reportedly unhappy with Honda’s request for it to become a subsidiary, instead expecting to be treated as an equal in the partnership.
This was despite experts seeing Nissan as bringing less to the table for the partnership, due to its financial hardships and shrinking market share in key regions.
Meanwhile, Honda was reportedly frustrated with the speed of Nissan’s restructuring as well as the depth of its financial troubles.
Honda CEO Toshihiro Mibe had previously said Nissan getting its financial house in order was a “prerequisite” for the merger.
Last week, Uchida-san announced Nissan’s quarterly financial results, and spoke of the carmaker’s future following the breakdown in Honda negotiations.
“Can we continue to survive as a standalone company?” Mr Uchida told reporters.
“We’ve been discussing that for some time now. This is a big subject matter. Without taboo, we have to explore all options.”
The Financial Times reports him as additionally saying: “My responsibility is truly significant… [but] stepping down without any improvement is irresponsible. It’s not my intention to hang on to this position.”
The report is the latest in what has been a wild ride since Honda, Nissan and Mitsubishi – of which Nissan is its largest shareholder – signed a memorandum of understanding in December 2024 to merge by mid-2026.
All appeared to be set to go ahead early on following the announcement, but reports soon emerged that there were frictions between the companies, or at least Honda and Nissan, with Mitsubishi left to be little more than a bystander.
According to the Financial Times, however, Nissan’s close relationship with Mitsubishi holds plenty of appeal as the smallest of the three Japanese firms has a strong presence in south-east Asia plus plug-in hybrid technology.
Nissan is Mitsubishi’s largest shareholder but recently sold off an undisclosed portion of its 34 per cent stake.
Renault – the main title holder in the Renault-Nissan-Mitsubishi Alliance – also recently reduced its stake in Nissan, from 43.4 per cent to the current 35.7 per cent holding.
Uchida-san, Mibe-san and Mitsubishi Motors CEO Takao Kato
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.
Following the announcement that the merger wouldn’t go ahead, Nissan said it would undertake major cost-saving measures in a bid to recover 400 billion Yen ($4.14 billion) by the 2026 Japanese fiscal year.
For context, its operating profit slid from 478.4 billion Yen ($4.69 billion) in April to December 2023 to 64 billion Yen ($663 million) across the same period in 2024. Its net income also dropped by 320.2 billion Yen ($3.3 billion) to 5.1 billion Yen ($52.8 million).
Nissan is cutting shifts or completely closing some factories to cut costs
If Nissan elects to keep Uchida-san as its CEO and forgo any possibility of a merger with Honda, it could turn to Taiwanese firm Hon Hai Precision Industry, better known as Foxconn, one of the Apple iPhone’s makers.
Foxconn chairman Young Liu told reporters last week it “did have talks about acquiring a stake in [Nissan]”, but the company’s “main goal is co-operation”.
According to Mr Liu, such co-operation could see Foxconn contracted to produce vehicles for Nissan or even Renault or Honda.
Jun Seki, chief strategy officer for Foxconn’s EV division and a former Nissan executive, met with Renault boss Luca de Meo in December 2024 to discuss acquiring shares held in the trust.
This reportedly triggered panic within Nissan and led to the negotiations with rival Honda. When these fell apart, Bloomberg reported word from Nissan sources that the carmaker would instead look for a partner “from the technology sector and US-based”.
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