Honda and Nissan grabbed headlines in December 2024 when they signed a memorandum of understanding (MoU) to explore a merger. By February the following year, however, the two Japanese brands had already decided not to proceed with a single new holding company. Why? Reuters reported at the time that, rather than the initially stated merger of equals, Honda wanted to take control and turn Nissan into a subsidiary. The deal also fell apart because Honda pushed for deeper job cuts and plant closures, which met resistance from Nissan.

Although the merger talks ended abruptly only a few months after the announcement, it didn’t take long for reports to emerge about a different type of tie-up between the two companies. Now, Honda’s CEO and president has confirmed that a deal with Nissan is close. Nikkei Asia cites Toshihiro Mibe telling shareholders that negotiations between the two Japanese brands are “quite far along, with some aspects close to an announcement.”

While he didn’t go into detail about what the partnership will entail, Honda’s chief executive said the companies are “proceeding with each project in a win-win relationship.” From that statement, it’s clear the two aren’t looking to merge but rather to collaborate in specific areas of their businesses. Whether that means joint vehicle development, shared production capacity, or something else remains unclear.

Honda CEO and President Toshihiro Mibe

Photo by: Honda

Honda And Nissan Could Share ECUs

There are reports that Honda, Nissan, and Mitsubishi are working together to standardize electronic control units (ECUs) for next-generation models. These shared ECUs would be used across the three brands in vehicles scheduled to arrive around the turn of the decade. While not all details have been finalized, the ECU is expected to be used in hybrid and electric models.

Renault is also likely to have a say in the deal, as it still holds a 15% voting stake in Nissan, down from 43% in 2023. These new negotiations come as Nissan carries out a major cost-cutting program, which includes closing seven factories, shutting two design studios, and laying off around 20,000 employees. Under its RE:Nissan restructuring plan, the company is also reducing production capacity from 3.5 million to 2.5 million units.

Honda is undergoing significant changes of its own after posting its first annual loss in history. It recently canceled several EV projects due to demand concerns and has abandoned its goal of becoming an all-electric automaker by 2040. Instead, it is now betting on a new generation of hybrids, led by a wedge-shaped sedan and SUV duo expected in 2028.

2027 Nissan Frontier

Photo by: Nissan

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Motor1's Take: We’ll likely hear more about long-established automakers and their plans to team up in the future. With China breathing down their necks, legacy manufacturers are under pressure to tighten their belts to stay competitive. Joint development not only reduces expenses but also accelerates a vehicle's market launch.

Honda and Nissan are both under strain, and while merger talks have come and gone, it’s increasingly likely the two will still find common ground and collaborate on major projects.

The Latest From Honda And Nissan:

Source: Nikkei Asia

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- The Motor1.com Team