The idea of a union between Honda and Nissan appears well and truly dead now. The torrid affair didn’t even last two months, and it’s notably left Nissan back at square one, desperately looking for a partner to keep itself afloat. Or perhaps not so desperately, as new reports have given us insight into how the struggling carmaker’s pride may have scuttled its deal with Honda, now leaving it vulnerable to influence from outside the auto industry.
Multiple sources told Reuters this week that talks between the two companies began to disintegrate when Honda determined that Nissan wasn’t doing enough—or moving quickly enough—to take vital steps to ensure its future. Back in November, Nissan projected a staggering 70% reduction in operating profit for 2024. While 9,000 jobs were cut and CEO Makoto Uchida pledged to give up half his salary, the manufacturer’s supposed refusal to go further or close a number of plants was evidently viewed by Honda as an unwillingness to compromise. Meanwhile, Nissan feared that further downsizing would tank whatever value it had in the arrangement.
It seems that in January, Honda concluded that the best path forward, given Nissan’s predicament and unsatisfactory response, was that of an acquisition rather than a merger. The concept of Nissan becoming a subsidiary of Honda was untenable to the former; it wasn’t a part of the plan a month earlier, and Nissan’s top brass was reportedly deeply offended. Sources told Reuters that Honda’s proposal was considered “an affront to the dignity of Nissan, the older automaker.”
That brings us to February. Last week, Uchida reportedly met with Honda CEO Toshihiro Mibe to officially end negotiations. Remember, electronics manufacturing giant Foxconn, best known for building iPhones for Apple, had been pursuing Nissan last year up until the prospective deal with Honda became public. Since that arrangement is now off the table, Foxconn is talking about Nissan again, though its tune is slightly different than what was reported late last year.
“Purchasing its shares is not our aim; our aim is cooperation,” Foxconn Chairman Young Liu told media in Taiwan on Wednesday. It’s worth noting that this is the first time Foxconn has made any public remarks about its intentions toward Nissan. And Nissan appears to be willing to hear what Foxconn has to say, according to Reuters. The iPhone maker’s electric vehicle wing is run by Jun Seki, a former Nissan executive who had been in the running to helm the automaker before departing in 2023.
Renault is also guaranteed to play a role in whatever is next for Nissan, as it holds a 36% stake in its longtime ally. The French automaker has expressed an intent to reduce that to 15%, as the brands united under former CEO Carlos Ghosn seek to disentangle themselves. If Foxconn—or any other interested party for that matter—decides that mere cooperation isn’t enough, they’ll have to go through Renault.
Amid all of this, there have been rumblings (albeit unconfirmed) that the Japanese government acted as a guiding hand to bring Honda and Nissan together, hoping to strengthen its automotive sector against encroaching competition out of China. “This is coordinated by the government to build a competitive automaking industry,” one analyst told Bloomberg way back in August, when the deal between the two parties only concerned EV development.
Given that, one would imagine the recent developments between the companies have disappointed Tokyo, but we don’t know what the government would prefer for Nissan’s future at the moment. In calling off the deal. Nissan appears to only be willing to accept a helping hand if it doesn’t cede control in the process. Despite recent events, it’s still a well-established brand, and that counts for a lot. But age and name recognition alone can’t save any automaker, especially not today, when the entire business of building and selling cars is being uprooted.
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