Honda-Nissan-Mitsubishi Merger Officially Called Off

In a significant development for the automotive industry, Japanese automakers Honda, Nissan & Mitsubishi officially announced on February 13, 2025, that merger talks have been terminated, ending months of speculation and negotiation. It marks the collapse of one of the largest automotive deals valued at roughly USD $60 Billion which would have created the world’s third-largest carmaker, aimed at strengthening the positions of each of these automakers in the face of a rapidly changing landscape, with Chinese automakers now entering the global market and growing pushes for an electrified future.

Merger talks began in December 2024 and proposed the formation of a joint holding company to integrate resources and share the financial burden of developing advanced electric vehicle technologies, and autonomous driving systems. Honda however restructured the deal to make Nissan a subsidiary, a move met by strong opposition from Nissan’s executives to preserve autonomy.

Nissan has been struggling financially and reported a 94% plunge in profits in the first half of 2024. They announced plans to cut 9,000 jobs and reduce production by 20%. Honda, however, has reported a 5% YOY increase in Q3 profits. Owing to Nissan’s financial woes, Honda wanted to maintain dominance in the partnership, with Nissan struggling to maintain equal footing.

The automakers have however announced an agreement to collaborate on EV development and autonomous driving technology under a strategic partnership. It aims to maintain their autonomy while still pooling resources to strengthen their market positions.

All Japanese automakers have yet to respond to the competition faced by affordable and increasingly competent Chinese electric vehicles flooding the market, with none of them having a diverse portfolio of electric vehicles ready to fight the onslaught.