Is Nissan merging with Honda?
Valerie Raskovic
Aug 12, 2025
Back in December 2024, Japan’s auto giants Nissan and Honda surprised the industry by announcing plans to merge under a new holding company. This merger would essentially create the third largest automaker in the world, with a total worth anywhere from $50 to 60 billion, trailing behind only Toyota and Volkswagen. The merger would offer multiple benefits to both companies; amongst the most valuable are deep savings through unified R&D, shared vehicle platforms and streamlined production.
Nissan vehicle reliability and reputation have been on a downturn the last few years with a decline in sales and serious budgetary constraints. Nissan needed resources to help revitalize its product and brand image. By failing to reinvest into R&D, Nissan fell behind in the new electrification craze; in fact, the brand currently only offers 2 EVs, the Nissan Leaf and the Nissan Ariya. While the Nissan brand is renowned for affordability and nimble fun handling, they have failed to introduce redesigned models on new platforms featuring the latest tech and desirable options that appeal to the modern consumer.
Although the current administration’s decision to lift the electric mandate may have benefited Nissan, since the company has relatively few fully electric models, it will not be enough to secure their long-term success. The new administration may have served as a double-edged sword, just as the decision to remove the electric mandate may have benefited the company, Trump’s newly enacted tariffs are predicted to hurt the company. Because Nissan has assembly plants in Mexico and exports components for cars from all over the world, they may be hit by paying higher prices to get cars onto showroom floors.
Needless to say, the merger was initially welcomed by Nissan. However, with a market value nearly 5 times greater than Nissan, Honda is worried about Nissan management and their ability to revitalize the brand. While initially the merger was presented as a merger between equals the deal took a different turn. In early February 2025, insiders revealed that Honda had shifted its stance, proposing that Nissan become its subsidiary rather than a co-equal partner, which Nissan leadership rejected outright. While corporate tensions and disagreements over governance escalated, the deal quickly began to unravel. On February 13, both companies confirmed they had officially terminated their memorandum of understanding. It appears control was a contentious issue that neither of the companies wanted to compromise on. While Nissan wanted to retain control over the brand, considering the brand’s instability after the arrest of the previous CEO Carlos Ghosn and various financial improprieties unveiled when the scandal came to light, Honda was concerned about the company’s structure and the ability to recover. Honda remained adamant on maintaining control over the brand and management.
In the fallout, Nissan took some serious losses when Nissan shares plunged nearly 5% on the Tokyo Stock Exchange as uncertainty deepened, while Honda’s stocks climbed by as much as 8%, signaling investor relief. With Nissan now operating independently, the company is under pressure to raise R&D and development budgets in order to revive performance. Nissan remains in a state of crisis and without a major deal or restructuring plan. The beloved auto manufacturer is doomed.
In a significant leadership shake-up, Nissan CEO Makoto Uchida resigned, with Chief Planning Officer Ivan Espinosa stepping into the role as of April 1, 2025. The move may pave the way for renewed merger discussions, but under what terms remains unclear. Meanwhile, Nissan is aiming to reduce spending by cutting 9000 employees and 20% of their global production capacity. Additionally, they have reduced vehicle production from 3 shifts to just 2. According to industry insiders, Nissan is also exploring the possibility of working with other strategic partnerships, including partnerships with Foxconn and other tech firms.
While the future seems unclear at the current moment for Nissan, we sincerely hope that the brand can pull out of this downturn and make a comeback, producing the fun-to-drive, affordable cars we loved growing up.
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