New developments emerge on the Honda and Nissan merger

Honda pushed for a bigger say in the to be formed holding company, and asked Nissan to become subsidiary.

The Honda and Nissan merger that has recently been the talk of the automotive industry has all but hit a dead end according to sources. Over the past couple of months, both the car makers have been in discussion to form a strategic partnership going into the future.

Recently, Honda pushed for a bigger say in the to-be-formed holding company and asked Nissan to become subsidiary. Nissan is said to have rejected this proposal. It is also said that from the beginning of the merger talks, a number of Honda executives were not happy with the merger plans, the concern being the current financial state of Nissan. This has been revealed by insiders who spoke on the condition of anonymity. The insider also said that Honda had viewed Nissan's restructuring progress as a condition for a potential merger. It was also considering factors such as the projections of the profitability of Nissan models. Hence Honda decided it needed to lay down  "strict" conditions for a merger.

Nissan is currently seeing a drop in sales worldwide and big layoffs are on the anvil across its global operations. The merger was seen as a lifeline for Nissan. Honda on the other hand still has a profitable two-wheeler business. Nissan sells more than three million vehicles a year, while Honda sells nearly four million vehicles worldwide. A merger would have made them the third largest automaker group behind Toyota and Volkswagen.

Talks are still underway and nothing official is expected to be announced until at least next week when Honda and Nissan report their earnings for the recently ended October to December quarter of 2024. These new developments had Nissan’s shares fall nearly 5% in trading on Wednesday. Honda’s shares on the other hand gained more than 8%.

Source: The New York Times