Hondissan? Nissonda? Nissan and Honda Call the Whole Merger Thing Off
Honda and Nissan, it turns out, have irreconcilable differences.
2/13/25 Update: The merger idea is dead. Honda and Nissan have officially called off merger talks after failing to agree on the role Nissan would play in the proposed company.
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According to Reuters, the negotiations broke down over changes in Nissan’s anticipated role in the new company. The original concept was a true merger, but as Nissan’s troubles came into focus, Honda changed its proposition, suggesting that Nissan become a subsidiary of Honda. This idea did not sit well with Nissan officials, who sources say are in denial about their company's precarious position. Nissan today announced its third-quarter financial results, with year-over-year decreases in revenues and profits, and revised its 2024 outlook downward, with an anticipated net loss of 80 billion yen (about $522 million). Nissan could face further problems from the Trump administration's threatened 25 percent tariff on products produced in Mexico and Canada. About 27 percent of Nissan vehicles sold in the Untied States are built in Mexico, a higher percentage than Honda or Toyota.
Honda and Nissan will continue to work on joint projects, but the two companies becoming one? That ain't gonna happen. Perhaps that's for the best, because neither "Nissonda" or Hondissan" were very appealing names.
The original article from 12/23/2024 continues below.
Who had Honda and Nissan discussing a corporate merger on their 2024 bingo cards? The Nikkei reports the two Japanese automakers are doing just that, in a tacit acknowledgment that the churn in an industry grappling with electrification isn't settling down anytime soon—and is perhaps best handled with friends. Look at Stellantis (created in 2021 and joining 14 former Fiat Chrysler and PSA Group brands into a single trans-Antlantic empire); Hyundai and Kia; General Motors, Volkswagen Group, and so on. There are fewer and fewer small, independent automakers out there—even Mazda has tie-ins with Toyota these days.
12/23 Update: Nissan, Honda, and Mitsubishi held a press conference on the current state of the Memorandum of Understanding. The story has been updated with this new development.
Currently Nissan and Honda are Japan's second- and third-biggest automakers, behind Toyota. Their pairing up would give both brands a stronger path forward with electrification and full EVs, something Honda in particular lags many competitors in. Honda, in fact, recently introduced two EVs—the Honda Prologue and Acura ZDX SUVs—based on General Motors technologies, just to get its North American EV presence going; it has smaller EVs overseas, and many more planned in the future. Nissan arguably helped kick off the modern, attainable EV market with its original Leaf, but allowed that tech to go stale over the years. Today, the Leaf is relatively cheap but uses a weird plug to charge that's fast fading out of style, delivers sub-par range, and is rather boring. It's been joined by the Ariya electric SUV with a more appealing form factor and better range and performance, and more models are promised in the future, including possibly a small pickup.
Honda and Nissan hitching up isn't a complete surprise, either; the two companies signed a (non-binding) Memorandum of Understanding back in March, committing to collaboration on EVs going forward. Statements released by both companies reiterated that agreement, though neither Honda nor Nissan confirmed the Nikkei report that negotiations for a full merger have begun. Such an agreement could get complex quickly, given Nissan's stake in Mitsubishi, another Japanese brand, and French automaker Renault's stake in Nissan. But time will tell how things shake out. For now, the multibillion-dollar move makes sense on paper, and would spawn a new global automotive juggernaut to join the rest.
“Business Integration” is All but Assured and Mitsubishi May Join
Just two days before Christmas, a surprise announcement made by Nissan, Honda, and Mitsubishi addressed where the talks on the MoU now stand. If all goes to plan, by June of 2025 Nissan and Honda will agree to form a new company. This effectively confirms the news above, or at least the intent to merge. Mitsubishi will also decide to join by the end of January, if talks do indeed continue between Nissan and Honda on this integration.
A large portion of this agreement is reliant upon Nissan turning itself around and becoming successful again, even if neither company elaborated on what “success" looks like. In comparison, Honda bought back one trillion Yen worth of its own shares off the Tokyo Stock Exchange (TSE) to shore itself up in preparation of this all but inevitable merger. The goal is to fully form this new company under a new name, delist Nissan and Honda from the TSE, and list this new parent company by August 2026. While not mentioned, we’d imagine that Mitsubishi would need to also delist itself from the TSE.
The rationale of this giant company in waiting is the emergence of electrification being the future of mobility along with the challenges of competitors who are strictly EV brands, particularly from China. All three company CEOs stated that their merger will allow all three brands to leverage their strengths: Honda with its electrification options, Nissan with its body-on-frame vehicles, and Mitsubishi with its truck development. The board of this new company—of which a name hasn’t been decided at this time—will be decided by Honda as it has the best market cap of the three companies, though this may change as the new parent company matures.
What this means for the current selection of vehicles from all three brands, that’s mostly up in the air. There may be some culling of models in both lineups, but all three brands believe that model overlap isn’t a bad thing and could help increase synergy between the brands. As far as the collaborations between Nissan and Renault along with Honda and GM, both CEOs believe that they will continue those collaborations and those will become assets. Honda’s CEO specifically stated the advantage of having Renault remain on board will help them grow within some markets in Europe. Not long after this press conference, Renault released a statement that it was still the main shareholder of Nissan but will consider all options based in “the best interests of the Group and its stakeholders.”
This story was originally published December 17, 2024, and has since been updated to reflect new developments.
A lifelong car enthusiast, I stumbled into this line of work essentially by accident after discovering a job posting for an intern position at Car and Driver while at college. My start may have been a compelling alternative to working in a University of Michigan dining hall, but a decade and a half later, here I am reviewing cars; judging our Car, Truck, and Performance Vehicle of the Year contests; and shaping MotorTrend’s daily coverage of the automotive industry.
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