While Honda and Nissan work on a merger, Mitsubishi can choose to stay independent
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by Brad Anderson
3 hours ago
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- The two Japanese car manufacturers had initially planned to detail their merger in late January.
- Honda would have a close look at Nissan’s restructuring measures before moving forward.
- Mitsubishi can remain independent, preferring partnerships to full fusion with Honda and Nissan.
The automotive world was caught up in December when Honda and Nissan revealed that they were under discussion to merge into a single company. Initially, the plan was to announce the key details by the end of January, but the two car manufacturers have now pushed this chronology in mid-February.
According to the former boss of Nissan and Renault, Carlos Ghosn, Honda’s involvement in these talks may not be entirely voluntary. He suggests that the Japanese Ministry of Economy, Commerce and Industry pressure on Honda to merge in order to maintain Nissan. Meanwhile, Honda clearly indicates that if this merger will occur, Nissan must prove that it can turn, both operational and financially.
Read: Honda-Nissan Merger-How do you solve a problem like Mitsubishi?
Anonymous sources indicate that Honda wants more time to assess Nissan’s restructuring efforts before engaging in the next steps. Nissan has already announced its intention to reduce 9,000 jobs worldwide, has reduced global capacity by 20% and introduce early retirement programs in three American factories. However, despite these measures, Kyodo News Note that Honda is not convinced and expects Nissan to implement even more aggressive costs.
And Mitsubishi?
Then there is Mitsubishi, who was loose in these discussions but seems less than eager to connect. The reports suggest that the company prefers to remain listed on the stock market and could rather focus on more limited collaborations with Honda and Nissan in the future. Mitsubishi should make a final decision on what is the best this month.
Herculean task of Nissan
If Nissan wants to achieve its objectives before the deadline for the merger in August 2026 provisional, it will have to generate around 400 billion yen (2.6 billion dollars) during the year 2026. This is an intimidating challenge, given that its operating profit recently plunged from 336.7 billion yen ($ 2.3. billion) to only 32.9 billion yen ($ 225 million). Worse, its net income for the first half of the 2024 fiscal year deposited 93.5%, against 296.2 billion yen ($ 2.02 billion) to only 19.2 billion yen (~ 131 million dollars).
The president and chief executive officer of Honda, Toshihiro Mibe, said it frankly: “Integration will not be carried out unless Nissan and Honda perform it as two companies capable of standing.”
