The Reasons Why Nissan and Honda Didn't Work Out Together

Have you heard—the proposed $60 billion partnership between Nissan and Honda has fallen apart?

The Japanese automaker is now without a clear strategy for recovery after the company cut its profit forecast by 70% and announced a restructuring plan involving 9,000 job cuts and a 20% reduction in production capacity.

According to a new report from Reuters, the deal collapsed over disagreements on corporate structure, factory closures, and Nissan’s reluctance to acknowledge that it really had no leverage at all in the deal-making process from its weakened position.

The merger was pitched as a way to help both companies compete with rising Chinese automakers and electric vehicle makers. On paper, if you squinted, the deal made sense, especially considering Nissan's excess American production capacity and the potential to share platforms and assembly lines.

Despite the cards being stacked against them financially, Nissan's leadership resisted Honda’s proposal to make it a subsidiary—insisting on near-equal terms despite its weaker position. Honda apparently became frustrated with Nissan’s slow decision-making and unwillingness to commit to deeper cost-cutting measures, and ultimately walked away from the deal.

The breakdown leaves Nissan in a vulnerable position. Honda had pushed for more aggressive cost reductions, including potential factory closures, but Nissan was unwilling to scale back operations at key plants in Kyushu, Tennessee, Mexico, and Sunderland.

Renault, Nissan’s largest shareholder, also opposed the deal, arguing that Honda’s terms amounted to a takeover without a control premium for Nissan shareholders. Renault has been gradually reducing its stake in Nissan and is now open to selling additional shares, potentially to new partners

Foxconn, the Taiwanese electronics giant is expanding into EV manufacturing, and is i nterested in working with Nissan but has downplayed intent to outright acquire the company.

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