On 13th February, 2025, Nissan Motor Co, Ltd, Honda Motor Co, Ltd and Mitsubishi Motors Corporation agreed to terminate their memorandum of understanding (MOU) regarding the consideration of the structure for a tripartite collaboration.

The only surviving agreement between the three companies is a strategic partnership involving the development of intelligent and electrified vehicles that was signed on Ist August 2024. However, Mitsubishi was always very much the minor entity in this agreement and even mores in the merger discussions between Honda and Nissan.

Motor industry observers around the world have suggested that Nissan’s pride was the main obstacle, because its parlous market and financial position rendered it very much the junior partner in any merger, and Honda made that very clear.

“With the proposal suggesting Nissan would become a wholly owned subsidiary, we were not confident that our autonomy would be preserved or Nissan’s potential could be truly maximised,” Nissan’s president, Makoto Uchida said.

Another obstacle was Renault, who reckoned it wouldn’t be getting enough cash for its Nissan shares.

The merger trap

Historically, major automotive companies don’t merge well and even outright acquisitions don’t often bear the marks of success. There are many examples of blended brands not working out as expected – Studebaker-Packard; Ford-Jaguar-Land Rover; BMW-Rover Group; Daimler-Benz-Chrysler; Fiat-Chrysler; Renault-Nissan; Nissan-Mitsubishi; Ford-Volvo; GM-Saab; Mahindra-SsangYong and Groupe PSA-Opel/Vauxhall are obvious marriages that weren’t blissful and most ended in divorce.

However, some mergers and acquisitions have worked and it seems that VW-Porsche; Geeley-Volvo-Lotus; Tata-Jaguar-LandRover and Hyundai-Kia are examples of at least relative success.

In the case of the December 2024 proposed merger, the company’s two presidents, Toshihiro Mibe of Honda and Makoto Uchida of Nissan, signed a memorandum of understanding, preceding the establishment of a holding company by August 2026.

Honda, currently Japan’s second-largest carmaker, was widely viewed as the most likely white knight able to rescue Nissan, which has struggled since former chairman Carlos Ghosn was arrested on charges of fraud and misuse of company assets in 2018. Ghosn denied the charges and fled to Lebanon.

In December, 2024, Ghosn derided the proposed merger as a “desperate move”, according to news agency, Reuters.

Nissan, valued at about US$10bn, has slashed 9000 jobs and reduced its global production capacity by 20 percent, after reporting a third-quarter-2024 loss of 9.3 billion yen (US$60m).

The merger, which would also have included smaller Nissan-alliance member Mitsubishi Motors, was unlikely to have much effect on the 4WD market in Australia, despite the new entity having the capacity to produce more than eight million vehicles annually. 

Honda makes a softroader pick-up in the USA, but has no real-4WD vehicles and both Nissan and Mitsubishi are well outsold by leading brands Toyota, Ford, Isuzu Ute and Mazda in Australia. In fact, Mitsubishi easily outsold Nissan in 2023.

Even more trouble is coming for Nissan and Mitsubishi Down Under, as the Chinese invasion really gets into stride, with probably four new model entrants in 2025. There’s also ute intervention coming from Kia.

Nissan and Mitsubishi have adopted cut-price marketing tactics Down Under, but at OTA we think that won’t continue to work, when the Chinese competition can offer more modern vehicles at a lower price.

Nissan is left with few options at this point. Taiwanese device maker Foxconn said it was interested in an investment with Nissan, in order to expand its EV production capabilities.

Foxconn chairman Young Liu has said that Foxconn desired cooperation with Nissan for its vehicle production expertise and hasn’t ruled out a share purchase, if required.

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