► Nissan and Honda cease merger talks
► Honda proposed being a parent company to Nissan
► Makoto Uchida, Nissan CEO, steps down
Nissan’s president and CEO, Makoto Uchida, has stepped down after talks to merge with Honda collapsed in February 2025. Uchida’s replacement is Ivan Espinosa, the brand’s chief planning officer, who will take the reins on 1 April.
The Nissan brand has faced years of dwindling sales and general industrial decline, which resulted in the brand looking to Honda for a ‘strategic integration.’ However, after talks kickstarted in December 2024, both brands announced they would be terminated in February 2025.
After the talks had been announced, reports had surfaced of irreconcilable differences between the two companies. A statement confirming the termination of the ‘memorandum of understanding’ says: ‘Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU, to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.
‘As a result of these discussions, both companies concluded that, to prioritise speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the MOU.’ Reading between the lines, the statement seems to imply that Honda’s proposal for being the lead company wasn’t a satisfactory one.
Instead, the two brands will ‘collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles, striving to create new value and maximise the corporate value of both companies.’
On the same day the talks were finished, Nissan announced its own efforts to help fix its worrying balance sheets. The brand says it will intend to save 400 billion yen by cutting around 2500 jobs; ‘indirect’ roles will be removed ‘by streamlining operations, implementing hiring reductions, and accelerating voluntary separation programs.’ Elsewhere, Nissan confirms its new Leaf will launch this year to help its product portfolio in several markets, as well as a new compact EV and new plug-in hybrids launching in 2025 and 2026.
Why the last thing Honda needed was Nissan, by Angus MacKenzie
Managing an angry, ailing Nissan was a distraction Honda couldn’t afford at a time when it needs to prioritise countering the threat from China’s increasingly competent and accomplished car makers.
The problem is cultural. Japan’s automotive industry remains siloed and insular; few executives move between companies. And Japanese car makers have a poor understanding of brands – the relative failure of Honda’s Acura and Nissan’s Infiniti luxury divisions are a case in point.
What’s more, Honda has long been one of Japan’s most singular car makers; echoes of founder Soichiro Honda, that stubborn and iconoclastic engineer, still resonate through the company’s culture. Honda can only view Nissan through the prism of its own experience. And it has likely struggled to understand what it has seen.
The signals from the top while the talks were ongoing weren’t encouraging. ‘That’s a difficult one,’ Honda CEO Toshihiro Mibe confessed when asked in a press conference why Nissan would make a good business partner. The announcement that Honda and Nissan were initially discussing merging their operations into a single joint holding company by August 2026 should have been accompanied by lots of frothy talk of synergies and efficiencies and improved profitability. After all, a merged Honda and Nissan (including Mitsubishi, in which Nissan has a controlling stake) would have been the third largest car maker in the world after Toyota and VW.
Instead, the proposed deal had the gritted-teeth vibe of a shotgun wedding. And there’s no doubt about who held the shotgun: Japan’s powerful Ministry of Economy, Trade and Industry (METI), which doesn’t want ailing Nissan to fall into the wrong hands. Be in no doubt: Nissan’s in big trouble. Operating profit collapsed 90 per cent in the six months to the end of September last year.
But Honda has problems too. It’s frantically playing catch-up in electric vehicles, its market share in China is shrinking, and the brand has a low profile on European roads.
On paper, though, there were potential synergies if the deal came together. One of Japan’s oldest car makers, Nissan, was long regarded as the best in terms of its manufacturing capability. It was also the most expansionist, building its first factory outside of Japan in 1966, in Mexico. As a result, Nissan has a bigger global manufacturing footprint that could in theory have helped Honda in markets such as Europe and Africa.
It has a mixed record in terms of product, however: the landmark Nissans, cars such as the Z cars and the Skyline GT-Rs, were conceived by maverick executives such as Yutaka Katayama, the first president of Nissan Motor Corporation USA, and Shin’ichiro Sakurai, the talented engineer Nissan acquired when it was asked to take over the failing Prince Motor Company in 1966.
Mainstream Nissans have tended to be worthy but dull: tough and durable vehicles with little charisma. And that’s where Honda could have helped. If Nissan epitomises Japan’s automotive establishment, Honda has always been something of an outsider. While wealthy Nissan was planning to build an imposing new headquarters building on Tokyo’s prestigious Ginza, motorcycle-making Honda was racing to beat a 1961 decree from METI’s predecessor that any company not building cars by 1963 would not be permitted to enter the sector.
Honda builds more internal combustion engines – about 20 million a year, for cars, motorcycles, boats and lawnmowers, among others – than any other company on the planet. Electric motors simply aren’t part of its engineering DNA. And though Nissan inexplicably managed to squander the first-mover advantage offered by the Leaf, which went into production two years before Tesla’s Model S, it could help Honda with EV development and manufacturing.
The humiliation will run deep at Nissan, a company that long regarded itself as Japan’s elite car maker. However, playing second fiddle to Honda won’t be as humiliating as having been rescued in 1999 by Renault, says a former European Nissan executive who spent years working in Japan. ‘They never got over the fact they were bailed out by westerners,’ he says, ‘and that a western management team did a better job of running Nissan than they could themselves.’
Moreover, though a merger with Honda would have helped both companies more efficiently invest in new products and new technologies, it may not have necessarily solved Nissan’s existential crisis. ‘I hate to be critical of current management,’ says a former Nissan insider, ‘but they’ve done nothing to define what the hell Nissan is and why it deserves to exist.’
Honda, seemingly, has been unlikely to figure that out, either.