Mitsubishi weighs decision to be part of Honda, Nissan merger

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Automotive Dive, an Industry Dive publication · Automotive Dive · Industry Dive

Larry Avila

Wed, Jan 29, 2025, 2:00 AM 4 min read

“A completely new business model will emerge and it’s not going to take 10, 20 years for that to happen,” Mibe said. “It's going to come much faster so including the new players we want to gain strength and by 2030, we need to have the right artillery in order to be able to be competitive in the battlefield.”

The general rationale behind a merger is to share resources, reduce costs and for each partner to provide something the other needs, Adam Bernard, founder and principal with AutoPerspectives said in an email to Automotive Dive.

Competitive pressure is also a reason Nissan and Honda are talking, said Stephanie Brinley, associate director, AutomotiveIntelligence, S&P Global Mobility. Joining forces would create better cost structure for both sides.

“Nissan and Honda can sell cars less expensively and be more profitable,” she said.

Weighing the pros and cons

Though experts point to the benefits of a merger between Honda and Nissan, Mark Barrott, partner, automotive mobility practice leader with Plante Moran, is uncertain if the deal will proceed.

“Honda is looking at it, ‘what’s in it for me,’” Barrott said. Honda has a broad business including motorcycles and other interests, though the automaker wants to grow its truck sales.

Nissan and Honda compete in the passenger vehicle segment, especially in economy cars, Barrott said. However, Nissan has been successful growing its pickup truck sales.

Production capacity must also be considered as both automakers have substantial global operations, though Nissan is dealing with overcapacity and is in the midst of rightsizing its production, Barrott said.

According to the merger details released in December, Honda would hold a majority of the leadership positions in the new joint holding company but it also will include leaders from Nissan. Both sides will need to work together to blend operational cultures, Barrott said.

“There’s pros and cons on both sides of it,” Barrott said of the merger. “You’re really in the depths of a very, very difficult financial situation.”

A potential hurdle

Bernard said Renault Group’s ownership stake in Nissan may factor into whether the deal proceeds. He said Nissan’s European commercial vehicle business is largely Renault-based, and almost all of its small and compact entries are based on platforms shared with Renault.

Even if the merger doesn’t happen, Bernard expects the companies to continue collaborating on developing automotive technology.

“I do think the earlier agreement to collaborate on software and electrified propulsion makes sense, but a full merger seems a harder sell and even harder to execute,” Bernard said in an email.

No deal with Honda doesn’t mean the end for Nissan, Brinley said. Nissan has noted restoring profitability is a priority.

“Nissan may be able to find another way,” she said. “Nissan’s not going broke tomorrow. They’re not shutting their doors tomorrow if this doesn’t happen.”

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