The Honda-Nissan Merger Could Be Back on the Table

When news broke of official merger talks between Honda and Nissan came to light earlier this year, it seemed like there was relief on the horizon for the latter carmaker. It’s no secret that the Yokohama, Japan-based manufacturer had been struggling, but the prospect of a bailout from Honda appeared as a kind of salvation. That is, until it all fell apart.

It wasn’t Honda’s decision to walk away, according to Japanese newspaper Nikkei; Nissan took the first step out of the door after differences over ownership stake arose. But the tables have turned again, according to the Japanese business paper, because current Nissan CEO Makoto Uchida is reportedly set to resign within the week, paving the way for new executive leadership amid the company’s ongoing financial turmoil.

Uchida has been a top executive with Nissan since 2019, but inside sources at the automaker told Nikkei that personnel upheaval has been coming in a strong way.

“We are approaching a time when personnel, including the top management, will undergo major changes,” a reported Nissan insider told Nikkei.

The apparent, imminent departure of Nissan’s top boss would come in no small part because he failed to broker a merger deal with Honda, according to reporting from both Nikkei and The Financial Times.

Naturally, there is a shortlist of candidates who could succeed Uchida, with reporting from Reuters suggesting that Nissan’s chief financial officer Jeremie Papin, chief planning officer Ivan Espinos, and chief performance officer Guillaume Cartier are all in contention. It’s not immediately clear if the next CEO will serve in an interim position or if the appointee will act as a permanent replacement. Either way, it seems probable that one responsibility of the next acting CEO will be pushing the merger with Honda through.

Previous merger discussions had fallen apart after Honda had proposed Nissan become a subsidiary and not an equally empowered arm of the newly form conglomerate. Nissan executives went as far as to call the proposition of becoming a subsidiary an “insane decision.” That, however, may be back on the table.

“We don’t know if it will be a wholly owned subsidiary, but the talks will probably proceed in the direction of accepting Honda’s investment,” an source inside Nissan told Nikkei.

Honda is not the only merger partner that Nissan is reportedly considering. Reuters claims that Nissan is eyeing Taiwanese electronics company Foxconn as a potential match, especially as the automaker aims for further electric vehicle development. Similarly, Mitsubishi’s future remains murky, as the automaker is currently bonded with Nissan but may not join future partnerships alongside its 25-year alliance partner.

Nissan’s current troubles largely started with the dramatic departure and subsequent fugitive escape of former CEO Carlos Ghosn in 2018. The automaker has made strides to repair its internal workings and external image, but recovering from the shakeup without strong executive leadership — especially during a pandemic — proved challenging. Additionally, competition from Chinese EV manufacturers and strong sales from domestic competitors at Honda and Toyota have pushed Nissan to the brink. Time will tell if Nissan can recover, but it’s possible that new executive leadership could do the trick.

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