On Thursday the boards of Nissan Motor Co. and Honda Motor Co. announced they would walk away from negotiations to merge the two companies, as local media reported. The decision came just hours before executives were scheduled to address reporters about the status of talks that began at the end of last December with the aim of forming a joint entity. Local outlets credited Nikkei and TBS as the sources for the coverage.
Observers had noted in the days leading up to the announcement that the talks faced a significant hurdle around how ownership in a potential joint venture would be structured. The discussions, launched late last year, aimed to create a merged automaker with a clear governance framework and shared responsibilities. As the two firms tried to align their visions, disagreements grew over who would own the merged company and how profits and decision making would be allocated. The decision to halt the talks was publicly signaled by both boards, signaling the end of this round of negotiations.
The central dispute centered on Honda’s plan to make Nissan a wholly owned subsidiary within the joint venture, a model Nissan rejected as nonnegotiable. In addition, Honda reportedly grew dissatisfied with the pace of Nissan’s restructuring program designed to address economic challenges, including a 20 percent reduction in global production and the loss of about 9,000 jobs. These factors underscored deep rifts over strategic direction and what the combined company would ultimately look like in terms of control and market execution.
From a market perspective, Honda ranks as the second-largest Japanese automaker by sales, behind Toyota, while Nissan sits in third. Had the merger progressed toward completion with a target year of 2026, it would have created the third-largest automaker in the world. Analysts noted that a combined entity could have pursued scale in electrification, platform sharing, and global manufacturing, potentially altering the competitive landscape. Yet the divergence in governance and growth plans weighed heavily against a smooth integration, making the forecast uncertain.
The executives were set to speak to the press about the failed integration plan. Toshihiro Mibe, the chief executive of Honda, was scheduled to hold a press conference at 16:50 local time, while Nissan’s Makoto Uchida was due to address quarterly results an hour later. The timing highlighted how the collapse of talks would influence the immediate communications strategy and strategic updates for both companies, including how they manage capital allocation and future investment plans.
Industry watchers emphasized the broader implications for suppliers, customers, and workers as both firms reassess priorities. A merger of this scale would have reshaped procurement, research and development, and manufacturing footprints across Asia and beyond. With the talks ended, both companies may pursue more focused collaborations in technology and procurement or chart separate growth paths, always with an eye on profitability, debt reduction, and portfolio optimization. In the near term, investors will scrutinize how each company reshapes its restructuring programs and investment plans to support new growth trajectories.
In the broader context of the global auto industry, the decision signals a cautious stance toward mega mergers amid shifting demand, supply chain pressures, and regulatory scrutiny. While scale can aid capital expenditure on electrification and advanced manufacturing, governance complexity and cultural alignment often erode expected synergies. For Honda and Nissan, the path forward may involve selective cooperation in technology development or joint procurement rather than a full merger, as they pursue competitive resilience in a rapidly evolving market. The end of the talks suggests that both firms will continue pursuing opportunities that strengthen core operations while preserving strategic independence.