- The two Japanese carmakers had initially planned to detail their merger at the end of January.
- Honda is said to be taking a close look at Nissan’s restructuring measures before going ahead.
- Mitsubishi may stay independent, preferring partnerships over full merger with Honda and Nissan.
The automotive world was caught off guard in December when Honda and Nissan revealed they were in discussions to merge into a single company. Initially, the plan was to announce key details by the end of January, but the two automakers have now pushed that timeline back to mid-February.
According to former Nissan and Renault boss Carlos Ghosn, Honda’s involvement in these talks may not be entirely voluntary. He suggests that Japan’s Ministry of Economy, Trade, and Industry is pressuring Honda to merge in a bid to keep Nissan afloat. Meanwhile, Honda is making it clear that if this merger is going to happen, Nissan needs to prove it can turn itself around, both operationally and financially.
Read: Honda-Nissan Merger – How Do You Solve A Problem Like Mitsubishi?
Unnamed sources indicate that Honda wants more time to assess Nissan’s restructuring efforts before committing to the next steps. Nissan has already announced plans to slash 9,000 jobs worldwide, cut global capacity by 20%, and introduce early retirement programs at three U.S. plants. However, despite these measures, Kyodo News reports that Honda remains unconvinced and expects Nissan to implement even more aggressive cost-cutting strategies.
What About Mitsubishi?
Then there’s Mitsubishi, which has been loosely included in these discussions but seems less than eager to sign on. Reports suggest the company prefers to remain publicly traded and might instead focus on more limited collaborations with Honda and Nissan in the future. Mitsubishi is expected to make a final decision on what’s best sometime this month.
Nissan’s Herculean Task
If Nissan wants to meet its targets before the tentative August 2026 merger deadline, it will need to generate roughly 400 billion yen ($2.6 billion) in fiscal 2026. That’s a daunting challenge, given that its operating profit recently plunged from 336.7 billion yen ($2.3 billion) to just 32.9 billion yen ($225 million). Even worse, its net income for the first half of fiscal year 2024 nosedived 93.5%, from 296.2 billion yen ($2.02 billion) to a mere 19.2 billion yen (~$131 million).
Honda president and CEO Toshihiro Mibe put it bluntly: “The integration will not be realized unless Nissan and Honda execute it as two companies that are able to stand on their own feet.”
