Nissan walks away from Honda merger talks

Nissan is backing out of merger talks with Honda after months of negotiations failed to produce a deal.

For context: The two automakers had been exploring a plan to form a joint holding company by 2026, which would have made them the world’s third-largest carmaker, trailing only Toyota and Volkswagen. The logic behind the merger was clear—scale up to compete with a flood of low-cost Chinese EVs.

Driving the news: But behind closed doors, the deal ran into major roadblocks over leadership control, valuation, and Nissan’s financial struggles, reports Nikkei Asia.

Why it fell apart:

• Honda proposed making Nissan its subsidiary—an idea that “met with vehement opposition” inside Nissan, according to Kyodo News. Nissan saw itself as an equal partner, not a junior one.

• Nissan, still recovering from its rocky breakup with Renault, needed this deal more than Honda did. But Honda wasn’t convinced Nissan’s turnaround plan was strong enough to justify a merger.

• In November, Nissan announced 9,000 global job cuts, but factory resistance stalled deeper restructuring efforts—something Honda saw as critical to the deal.

• The two sides couldn’t agree on Nissan’s valuation under the joint company, and without that, plans to move forward grinded to a halt.

What Nissan is saying: The company isn’t calling the talks completely dead just yet. In a statement, it acknowledged reports that it’s pulling out of the merger agreement but added, “this matter has not been announced by our company.” Nissan insists it’s still holding “various discussions” with Honda and will “determine our direction” by mid-February.

The bigger picture: A Nissan-Honda merger would have been a game-changer, bringing together two legacy brands to better compete in a rapidly shifting auto market. Mitsubishi, already part of an alliance with Nissan, was supposed to be included in the talks as well. But with Nissan walking away, the idea of consolidating Japan’s automakers into a global powerhouse looks far less likely.

What’s next: Even if the merger is off the table, Nissan and Honda could still collaborate on EV development. But for now, they remain separate companies—facing a market where going it alone is getting harder by the day.

Become an automotive insider in just 5 minutes.

Get the weekly email that delivers transparent insights into the car market.

Join 90,000+ others now, it's free:

In today's automotive landscape, car buyers invest more time than ever in researching, considering, and comparing options. But for dealers, the challenge lies in pinpointing the audience ready to make a purchase.

Enter Premier by Edmunds.

Premier offers dealers a groundbreaking way to connect with in-market car shoppers precisely when, where, and how they prefer. With over 20 million monthly visits, Edmunds.com is the go-to destination for buyers seeking market insights, expert advice, and budget tools to make informed decisions.

Through Edmunds Premier, dealers gain access to this highly coveted audience. Simply list your new and used inventory on Edmunds, and watch as qualified, in-market traffic flows directly to your vehicle detail pages on your website.

Don't miss out on this opportunity to elevate your dealership's visibility and sales performance. You can sign up for Premier today at Edmunds.com/CDG.