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Honda-Nissan Mega-Merger on the Brink of Collapse Amid Power Struggle

David Castro by David Castro
February 5, 2025
in Latest News
Reading Time: 3 mins read
0
It looks like things aren’t going to be easy – Renault Responds to Nissan-Honda Partnership Talks: Evaluating Options due to Industry Shakeup

Makoto Uchida, Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, gestures next to Toshihiro Mibe, Director, President and Representative Executive Officer of Honda, as they attend a joint press conference on their merger talks, in Tokyo, Japan, December 23, 2024. REUTERS/Kim Kyung-Hoon

What started as a potential game-changing merger between Honda and Nissan is now on the verge of implosion, with tensions escalating over control of the new automotive giant.

Signed in December 2024, the Memorandum of Understanding (MOU) between the two Japanese automakers promised a future where a joint holding company would emerge by 2026. However, conflicts behind closed doors may have already doomed the deal, as multiple reports suggest the merger talks could soon be called off.

The Power Struggle: Did Honda Want to Take Over Nissan?

While the public narrative painted this as a strategic alliance, insider sources suggest that Honda had bigger ambitions—namely, turning Nissan into a subsidiary. According to The Asahi Shimbun, Honda’s aggressive push for control has met with fierce resistance from Nissan executives.

Former Nissan chairman Carlos Ghosn had already predicted this conflict months before the official talks began. In an eerily accurate warning, he stated:

“I can’t imagine for one moment how it’s going to work between Honda and Nissan unless it’s a takeover, unless it’s a disguised takeover by Honda of Nissan and Mitsubishi, with Honda in the driver’s seat.”

This power struggle has now led to Nissan’s board reportedly considering voting against the merger in a meeting as soon as today.

The Renault Factor: Honda Wants Nissan to Cut Ties

Another major roadblock? Honda’s demand to remove Renault from the equation.

Currently, Renault owns a 15% stake in Nissan, a legacy of their decades-old partnership. But Honda reportedly wants Nissan to buy back its shares from the French automaker before proceeding with any merger.

This is yet another sticking point that could drive the final nail into the coffin of this deal.

Where Does Mitsubishi Stand?

Mitsubishi, which had initially signed an MoU with Honda and Nissan for a potential alliance, has already distanced itself from the merger. While the company remains open to limited collaboration, sources indicate that Mitsubishi prefers to stay independent rather than be swallowed up in the corporate battle unfolding between its Japanese counterparts.

What Happens Next?

While Nissan maintains that discussions are ongoing, multiple reports—from Reuters to Nikkei Asia—suggest that the merger talks will be suspended, if not outright abandoned.

If this $300 billion automotive tie-up collapses, it would be one of the biggest “what could have been” moments in the industry. Had it gone through, the Honda-Nissan entity would have become the third-largest automaker globally, behind Toyota and Volkswagen Group.

With Nissan’s board reportedly set to vote on the matter, an official announcement is expected by mid-February.

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