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Author | Chai Xuchen
Editor | Zhou Zhiyu
The merger negotiations between Honda and Nissan, which originally had the opportunity to form the world's third-largest automotive group, have abruptly come to a halt.
On February 6, Nissan President Makoto Uchida led a team to Honda's Tokyo headquarters and decided to retract the letter of intent for the operational restructuring between the two companies. Decisions regarding whether to restart negotiations or narrow the scope of cooperation to the electric vehicle sector will be made as soon as next week.
This means that the operational integration plan between Honda and Nissan is coming to an end, with such a &#34;flash divorce&#34; occurring faster than any previous automotive group restructuring in history.
Two months ago, both parties announced the initiation of operational merger discussions, preparing to merge into a &#34;world-class mobility company with annual sales exceeding 1.4 trillion RMB and annual operating profits exceeding 139 billion RMB.&#34; According to the plan, the newly merged company was set to go public in August 2026.
Currently, domestic independent brands are making significant progress, and the market foundation of Japanese automakers is facing challenges. At the same time, in the wave of intelligent transformation, the cost of breaking through the barriers of competitors alone is enormous. Honda and Nissan's combined sales performance in 2023 exceeded 7 million vehicles, and both aimed to merge to form the world's third-largest automotive alliance after Toyota and Volkswagen, ensuring economies of scale.
Clearly a good strategy for &#34;warming together,&#34; why did the two giants ultimately prefer to &#34;survive alone&#34; rather than compromise?
During the formal negotiation process, Honda's prerequisite was that Nissan must develop an effective recovery plan. In November last year, Nissan announced a 20% reduction in global production capacity, but progress has been significantly delayed due to strong opposition from various regions.
To take the lead and accelerate decision-making, Honda tentatively proposed turning Nissan into a subsidiary. However, this was met with strong opposition from Nissan, which insisted on an equal relationship, leading to irreconcilable differences between the two parties.
&#34;Such conditions are difficult to accept,&#34; and within Nissan, the majority opinion was negative towards continuing negotiations. On February 3, Nissan's senior executives confirmed the decision to cancel the operational merger.
In fact, the &#34;personality differences&#34; between Nissan and Honda have been almost predetermined since their inception. Honda, which emphasizes technological innovation and brand independence, focuses on maintaining the company's independence and control; Nissan, on the other hand, has been seeking to strengthen its competitiveness through alliances, such as its long-term partnership with Renault Group.
Deeper contradictions lie in the technical realm. While global automakers are going all-in on pure electric vehicles, Nissan plans to use its e-Power hybrid technology as a transitional solution; Honda, however, is betting on the hydrogen energy track. This divergence is directly reflected in the negotiations as a debate over &#34;which technology to invest in for research and development in the next decade,&#34; with Nissan demanding the elimination of the hydrogen energy project, while Honda believes the pure electric route carries too much risk.
Clearly, these two fundamentally different corporate philosophies evolved into a power struggle at the merger negotiation table.
Before their potential partnership, neither party received blessings from the industry. Former Nissan CEO Carlos Ghosn bluntly stated that it would be difficult for the two companies to find synergies, as there was almost no complementary aspect, given that they operate in the same market with nearly identical products and very similar brands. Ghosn believed that the merger was more of a &#34;desperate move&#34; for Nissan
The electrification and intelligence competition has left Honda and Nissan exhausted. In the transformative automotive industry, surviving alone is not easy, and Nissan is teetering on the brink of bankruptcy. Financial reports show that its net profit for the first half of the 2025 fiscal year (April-September 2024) plummeted by 93.5%, recording 19.223 billion yen. Before this merger, Nissan executives revealed that the company had about 14 months of survival time left.
Nissan has little room left for trial and error. If it cannot find new allies to revitalize itself, it may need to seek &#34;external support&#34; as it did in its collaboration with Renault years ago. For Nissan, every step it takes from now on is a matter of life and death.
Fortunately, Nissan's vast manufacturing business and well-known brand still hold appeal. Last December, Foxconn's parent company Hon Hai Precision Industry reached out to Nissan to discuss equity investment, but the talks were temporarily shelved due to Nissan's negotiations with Honda. From Hon Hai's perspective, collaborating with Nissan could help realize its potential in the automotive sector and build an Asian new energy supply chain.
Additionally, reports suggest that Nissan hopes to find new allies from the American technology industry. A Nissan spokesperson stated that any details regarding negotiations with Honda will be announced as planned in mid-February.
The predicament of Japanese automakers is also a reflection of the &#34;water reversal&#34; faced by global automotive giants, as the entire automotive industry is currently shrouded in dark clouds.
At the end of last year, Volkswagen Group faced turmoil in its backyard, engaging in prolonged negotiations with unions over factory closures and pay cuts; Stellantis CEO Carlos Tavares left early due to a performance &#34;turnaround&#34;; General Motors cut its autonomous taxi business to preserve cash flow and decided to restructure its operations in China.
Perhaps ten years ago, most people could not have imagined this scenario, but in the profound transformation of the industry, it has unfolded before everyone. It can be described as an unprecedented upheaval in the history of the industry.
The decline of established automakers is a result of being swept up in the whirlwind created by new forces like Tesla, BYD, and Huawei, leading to a lag in product strength and organizational capability, while their once-solid market influence has rapidly eroded. In a consumer-driven market vote, the brutal elimination process offers no special treatment to the old giants.
When &#34;survival&#34; becomes the highest priority, Nissan and Honda must find a way to break through; otherwise, falling from grace will make it difficult to rise again

NSANY

A century's unprecedented automotive transformation

- Honda and Nissan's merger negotiations have abruptly ended, with Nissan retracting its intent for operational restructuring.  
- The two companies aimed to form a major automotive alliance but faced insurmountable differences in corporate philosophy and technology strategies.  
- As both companies struggle in a rapidly evolving automotive market, they must seek new partnerships to survive, or risk significant decline.

Nissan and Honda "flash divorce" in two months