Nissan’s potential merger with Honda appears increasingly uncertain as the Japanese automaker reportedly moves to step back from discussions, according to sources cited by Reuters. The proposed US$60 billion tie-up, initially aimed at creating the world’s third-largest car manufacturer, is now facing significant challenges as fundamental disagreements emerge between the two companies.
According to multiple sources, Nissan has grown uneasy after Honda suggested it become a subsidiary rather than proceeding with a merger of equals, which was the original framework of their negotiations. This departure from the initial terms has led to mounting concerns within Nissan, prompting the automaker to reconsider the talks.
While the fate of the merger remains unclear, Nissan and Honda have both stated that recent media reports on the matter were not based on official company announcements. They reiterated their intention to finalise a direction for their discussions by mid-February. However, the latter, which holds a market value of approximately JPY7.92 trillion – more than five times Nissan’s JPY1.44 trillion – has reportedly been sceptical about the former’s ability to execute its turnaround plan effectively. This hesitation has further complicated negotiations.
In response to the growing speculation, Nissan issued a statement on its website, clarifying that the company had not officially withdrawn from the agreement with Honda. It reiterated that discussions were still ongoing and that an official announcement would be made in mid-February, as per the memorandum of understanding signed on December 23 last year. Despite this, sources indicate that Nissan is facing strong internal opposition to Honda’s subsidiary proposal, further straining negotiations.
Renault, Nissan’s longstanding alliance partner, has also weighed in on the situation. The French carmaker, which owns a 36% stake in Nissan (with 18.7% held through a French trust), stated that it would “vigorously” defend its interests and those of its stakeholders. Renault has previously signalled openness to the merger, but is now closely monitoring developments.
Adding to the complexity, Mitsubishi—already in an alliance with Nissan—was also expected to participate in the merger talks. If the deal were to proceed, the combined entity would trail only Toyota and Volkswagen in global sales. However, with ongoing disagreements, the outcome remains uncertain.
