Honda CEO struggles to name benefits of Nissan merger

Honda could be the saviour of fellow Japanese carmaker Nissan, after the brands announced they’d merge by the middle of 2026 to save the latter from collapse.

However, Honda’s CEO reportedly hasn’t been convincing when questioned as to how a partnership with Nissan could help his own brand.

Singaporean publication Business Times reports Honda CEO Toshihiro Mibe was asked what makes Nissan a strong business partner, when the executive responded: “That’s a difficult one.”

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As reported last week, a definitive agreement laying out the specifics of the merger, including share transfers, will be completed by June 2025. Shareholders in both firms will then vote on the merger in April 2026.

If approved, Honda and Nissan will be delisted from the Tokyo Stock Exchange by late July or early August 2026, with a new holding company taking their place.

Mitsubishi – which is currently a part of the Renault-Nissan-Mitsubishi Alliance – will decide on whether it’s joining the merger by the end of January 2025. Nissan is its largest shareholder but recently sold off an undisclosed portion of its 34 per cent stake.

A merger between Honda and Nissan would make the new carmaker the world’s third-largest, based on 2023 sales volumes, behind market leader Toyota (including Lexus, Daihatsu and Hino) and the Volkswagen Group.

In 2023, Honda and Nissan sold 7.35 million, while Mitsubishi sold approximately 900,000, further increasing the total.

The potential three-brand merger would almost split Japan’s automotive industry in half, with Toyota heading the other side, as it also has minority shareholdings in Subaru, Suzuki, and Mazda.

Mibe-san has said the merger wouldn’t be “a rescue of Nissan”, with “prerequisite” of the merger being Nissan getting its affairs in order, so as not to be a drain on Honda’s resources.

In November 2024, Nissan said it was entering “emergency mode” with plans to reduce production capacity by 20 per cent and fire 9000 workers.

This was followed by The Financial Times reporting a senior official close to the carmaker said “we have 12 or 14 months to survive”.

A source close to Renault – which has had an alliance with Nissan since 1999 – reportedly told the publication it would be open to selling a portion of its shares to Honda.

Renault is wanting to further reduce its stake in Nissan – having cut its holding from 43.4 per cent to under 36 per cent last year – leaving the Japanese brand searching for a long-term, steady shareholder such as a bank or insurance group to provide financial stability.

Former Nissan CEO Carlos Ghosn – a wanted fugitive after allegedly under-reporting his income – criticised the potential merger as a “desperate move”.

“It’s a desperate move. It’s not a pragmatic deal because frankly, the synergies between the two companies are difficult to find,” Mr Ghosn told Bloomberg.

“There is practically no complementarity between the two companies. They are in the same markets. They are the same products. The brands are very, very similar.”

Mr Ghosn went on to claim Honda isn’t keen on the prospect of a merger, and is effectively being persuaded by Japan’s Ministry of Economy, Trade, and Industry (METI) to do so in order to keep itself alive.

“From one side, Nissan, it’s a desperate move to try to find the future. And from the other side, Honda, which I understand they are not very excited about this move.

“You have to count with METI in Japan, the METI had the big say in it.

“At the end of the day, they are trying to figure out something that could marry the short-term problems of Nissan and the long-term vision of Honda.”

MORE: Honda to merge with Nissan by middle of 2026MORE: Former Nissan CEO Carlos Ghosn claims Honda is being pressured into mergerMORE: Nissan has ’12 or 14 months to survive’ as financial situation gets dicey – report