One of the largest automotive mergers in history could fail just weeks after two popular brands boldly announced their intention to accelerate the progress of electric vehicles.
According to Reuters, a source close to the deal said the $60billion (£47.8billion) merger between Nissan and Honda could be cancelled in a move which would have created the third largest automaker in the world.
Honda had reportedly proposed turning Nissan into a fully owned subsidiary which impacted the relationship between the two Japanese brands since the initial merger made it seem like they would be equals.
In December, Nissan and Honda signed a memorandum of understanding (MOU) to begin discussions and considerations towards a potential integration between the two companies.
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The merger between Nissan and Honda could fall through, according to reports
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This was initially put forward to benefit both brands amid the move towards electrification and to fight against the rise of Chinese manufacturers offering far cheaper electric vehicles around the world.
Makoto Uchida, President and CEO of Nissan, said it was a “pivotal moment” for both brands which could create “unparalleled value” to customers worldwide.
However, these plans now appear to be in danger after tensions emerged regarding how the merger would work and the valuation of their assets.
The Financial Times reported that Nissan executives were “taken aback” by proposals for Honda to take full control of Nissan following a period of instability.
Following the reports of a failed merger, Nissan shares slid by more than four per cent on the Tokyo Stock Exchange, although Honda shares were up eight per cent.
Both Nissan and Honda said they aimed to finalise a future direction by mid-February, after Reuters reported that Mitsubishi may also leave talks to join the merger.
Speaking during the initial announcement of the merger agreement, Honda chief executive Toshihiro Mibe said it would only proceed if Nissan were able to turn their misfortunes around and cut costs.
Some experts have also highlighted the issues around President Trump launching tariffs on different countries and how this could affect manufacturing from these brands.
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Nissan has operated a manufacturing plant in Mexico for more than 50 years, which has shipped around eight million units since 1972, and is crucial for the brand to export to the United States.
While President Trump has temporarily paused his plans to slap a 25 per cent tariff on Mexican and Canadian exports, the looming threat of change could impact production for the manufacturer.
Vincent Sun, analyst at Morningstar, said: “Investors may get concerned about Nissan’s future (and) turnaround. Nissan also has a larger risk exposure to US-Mexico tariffs than Honda and Toyota,” Reuters reported.
In the first month of 2025, Nissan sold 7,129 cars worth 5.12 per cent of the total market share, while registered 1,624 new vehicles for 1.17 per cent of the market.
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Honda saw a significant 32.6 per cent drop in sales compared to the same time last year, while Nissan’s UK sales also fell by 17.5 per cent.
Despite this, Nissan is still outselling other popular brands like Renault, Skoda, Toyota, Vauxhall and Volvo.
