A $50 billion merger between Honda Motor and Nissan Motor has been canceled due to uncertainty over the benefits of combining their operations. The move, which aimed to create one of the world’s largest auto groups, was announced in December after Japan’s second- and third-largest automakers began exploring a partnership.
The reversal highlights the growing recognition that sprawling auto alliances may not be the solution for struggling automakers. Traditional manufacturers are facing intense competition from newcomers like Tesla and China’s BYD, which have established a strong lead in electric vehicles and advanced technologies.
Industry experts say that the failed merger is an example of legacy automakers trying to catch up with rapid technological changes rather than embracing innovation. “It was just automakers going back to what they know, rather than embracing change,” said Lucinda Guthrie, head of Mergermarket.
Despite the cancellation, Honda and Nissan will continue to collaborate on software and electrified vehicles. However, previous partnerships between legacy automakers have often struggled, as seen in the case of Ford Motor and Volkswagen’s electric vehicle initiative.
Honda had previously explored a partnership with General Motors, but ultimately decided not to extend their collaboration beyond two electric models. Nissan is restructuring its operations after a significant profit decline, and Honda’s executives were concerned about the company’s financial health.
The cancellation of the merger leaves Nissan exploring new opportunities, including a possible partnership with Taiwanese electronics giant Foxconn. “The pressures they face wouldn’t have changed with the merger,” said Ms. Guthrie. “You either embrace the future or stick with what you know.”
Source: https://www.nytimes.com/2025/02/13/business/honda-nissan-merger.html