Honda chief Toshihiro Mibe has ruled out making a hostile takeover bid for Nissan, which said a $58 billion (€46 billion) merger proposal to form the world’s fourth-largest carmaker failed to respect its autonomy.
Japan’s second- and third-largest carmakers officially abandoned discussions to combine on Thursday. The merger was meant to strengthen their competitiveness against China’s electric vehicle champions, but talks fell apart less than two months after both sides failed to agree on a governance structure.
“We never really thought about a hostile takeover bid option and have no plans to do so going forward,” Mr Mibe said on Thursday.
Nissan, the smaller of the two companies, had bristled at a revised proposal to turn it into a Honda subsidiary, which deviated from an original plan to establish a holding group for the two carmakers.
Mr Mibe justified the change in structure out of concern that “when tough decisions needed to be made, having representatives from both companies on the board may slow down decision-making”.
“We reaffirmed such integration would require decisive, painful decision-making,” he said.
Nissan chief Makoto Uchida said: “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.”
Renault, Nissan’s strategic partner, on Thursday called Honda’s proposal “unacceptable” and said “it did not include any premium”. The French company plans to continue supporting Nissan, of which it owns 36 per cent.
Attention now turns to how Nissan will survive a cash flow crisis. The company urgently needs support from an outside partner to stabilise its finances. Uchida said it was considering all options with “no taboos”.
Global private equity firms in Japan are monitoring Nissan’s situation, but people close to major funds say it is unclear whether Nissan is a viable investment proposition.
The carmaker also provided more details on Thursday about a sweeping restructuring plan unveiled in November, including reducing costs by ¥400bn (€2.4 billion) in the 2026 fiscal year by cutting 6,500 jobs at factories in the US and Thailand and 20 per cent of senior management roles.
The plan aims to make Nissan break even at 2.5 million vehicle sales, a far cry from its target of 4.5mn sales within three years, announced in March last year.
Nissan, which is suffering from an outdated product line-up and long-running infighting, swung to a ¥14 billion loss in the quarter to the end of December and now expects a full-year loss of ¥80 billion after earlier predicting a profit as high as ¥380 billion.
Both companies said in a statement on Thursday that they “concluded that, to prioritise speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions.”
Honda and Nissan said they would continue collaborating on a project basis on electric vehicles and software, as previously announced in March and August last year, although bad blood could get in the way.
Honda was triggered into the merger talks by Taiwanese iPhone assembler Foxconn, which has grand ambitions to enter EV manufacturing and made approaches to Renault about acquiring its stake in the Japanese carmaker.
Foxconn chair Young Liu said on Wednesday it was open to acquiring a stake in Nissan to achieve its goal of co-operating with car manufacturers by securing orders to build EVs for them, as it does with Apple’s iPhones.
While Nissan is in need of a partner, analysts and government officials said Honda required greater scale to give it a solid foundation for enormous investments in EVs, software and autonomous driving.
Honda on Thursday reported it had suffered an almost 40 per cent collapse in China car sales in the nine months to the end of December, although its pretax profits rose 25 per cent to ¥483 billion in the quarter to December due to record motorbike sales.
For the full financial year ending in March, Honda maintained expectations for net profits of ¥950 billion.
Japanese carmakers are also under pressure in the US, another major market, from President Donald Trump’s threat to put 25 per cent tariffs on Mexico and Canada, where Honda and Nissan have major production hubs.
Shinji Aoyama, vice-president of Honda, said the company was rushing to export vehicles from the two countries into the US ahead of a 30-day reprieve expiring but warned of a more than ¥20 billion impact to full-year profits if tariffs were enacted. – Copyright The Financial Times Limited 2025
