Nissan has reportedly walked away from merger discussions with Honda after a dispute over control, effectively ending plans to create the world’s third-largest carmaker.
According to sources, Honda wanted Nissan to become a subsidiary, a move that Nissan’s leadership found unacceptable.
The talks, formalised under a memorandum of understanding in December, were initially seen as a strategic response to mounting competition from Chinese automakers and the ongoing shift to electric vehicles (EVs).
However, internal resistance within Nissan ultimately derailed the deal.
Renault’s stake adds complexity
Renault, which holds a 36% stake in Nissan, has voiced concerns about the breakdown.
The French carmaker had signalled openness to the merger but is now assessing its options. A Renault spokesperson stated the company would "vigorously defend its interests and those of its stakeholders" following the collapse of negotiations.
This development raises questions about Nissan’s long-term strategy. Without Honda’s scale, it must now find alternative paths to remain competitive in an industry rapidly transitioning to electrification.
New partnerships under consideration
With Honda off the table, Nissan is reportedly exploring other partnerships, potentially within the tech sector. Foxconn, a Taiwanese manufacturing giant, has emerged as a possible ally, given its growing interest in EV production. Such a move would align Nissan with a technology-first approach, similar to partnerships seen elsewhere in the industry.
US tariffs add further pressure
The timing of the failed merger is also significant given potential trade disruptions. Reports indicate that US President Donald Trump is considering a 25% tariff on vehicles imported from Mexico and Canada, where both Nissan and Honda manufacture a substantial number of cars for the North American market. Any new trade barriers could further complicate Nissan’s financial outlook.
A turning point for Nissan
With the merger off, Nissan must now find a new strategy to compete in an industry dominated by rapid technological change and growing Chinese influence. Whether it aligns with a new partner or doubles down on internal restructuring remains to be seen, but the road ahead is anything but certain.