The proposed Honda-Nissan merger appears to be close to falling apart, with insiders claiming the two Japanese carmakers can’t agree on terms to become partners.
Nikkei Asia reports word from insiders that Nissan is set to step away from merger talks with its rival.
These insiders said the company believed the partnership would see it and Honda treated as equals, however Honda has proposed that Nissan should instead be a subsidiary – something that has caused considerable friction.
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For context, Honda has a market value of 7.92 trillion Yen ($82.65 billion), while Nissan’s market value is currently 1.44 trillion Yen ($15.03 billion).
Nissan has also been in major financial trouble recently, with industry experts arguing it has less to offer the partnership than Honda.
Comments made by sources to Reuters suggested merger talks could potentially restart.
The carmakers had previously announced they would develop a framework for the proposed merger by mid-February, before coming to a definitive agreement – laying out the specifics of the deal, including share transfers – by June 2025 and merging in mid-2026.
Nissan is currently a part of the Renault-Nissan-Mitsubishi Alliance, founded in 1999 between Renault and Nissan before Mitsubishi joined in 2016.
Last month Japanese outlet Kyodo News, citing insider sources, reported Honda wants Nissan to buy out Renault’s 35.7 per cent stake.
The stake, reportedly worth about 557 billion yen (A$5.78bn), is reportedly causing Honda concern, as it believes Renault’s stake could be purchased by a third-party during negotiations with Nissan.
Renault only recently reduced its stake in Nissan, from 43.4 per cent to the current 35.7 per cent holding.
In an additional report, Reuters was told by a spokesperson for Renault that it “would ‘vigorously’ defend the interests of the group and its stakeholders.”
While Mitsubishi was due to decide on whether it’s joining the merger by the end of January 2025, a report last month by The Japan News, citing unidentified sources, said the brand is making arrangements to exist outside of the Honda-Nissan merger.
This is despite earlier indications that it was strongly considering joining the partnership. Mitsubishi could reportedly still co-operate with Nissan and Honda, however.
Nissan is Mitsubishi’s largest shareholder but recently sold off an undisclosed portion of its 34 per cent stake.
A merger between Honda and Nissan would make the new 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.
In Australia, this order is inverted, with Mitsubishi delivering 74,547 vehicles last year, while Nissan and Honda managed 45,284 and 14,092 deliveries, respectively.
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