UPDATE: Nissan-Honda merger unravelling

UPDATED: This article was updated on 10/02/2025

As Honda and Nissan alliance discussions flounder, it seems Taiwan-based mobile phone producer Foxconn will resurface as a Nissan backer.

Taiwan Central News Agency reports that Foxconn top executive and former Nissan COO Jun Seki travelled to Japan to meet with Nissan executives this weekend.

It reports that at least “some of Nissan’s board is open to a partnership with the tech giant”, adding that a merger with a non-automotive player could “bring fresh technology and money” to ailing Nissan.

Foxconn parent company Hon Hai has expressed interest in buying Nissan share from Renault, the French company holding a block of stock in trust as part of an agreement to rebalance its crossholdings in the Japanese firm.

The Taiwanese company has signed a slew of automotive agreements in recent years as it builds inroads into the industry.

It has ambitions to produce its own EV, and has taken stakes in ZF Group, Stellantis, Saudi Arabian EV brand Ceer, American electric agricultural firm Monarch Tractor, German microprocessor manufacturer Infineon, and electronics giant Sharp.

Foxconn has previously proposed its own line of electric vehicles, including the Model B hatch, Model V utility, and Model N van.

The original article continues below:

NISSAN is reportedly seeking a new alliance partner as it prepares to terminate negotiations to form a joint holding with Honda.

According to a report published by Reuters, Nissan chief executive officer Makoto Uchida met with his Honda counterpart on February 6 saying he wanted to end merger talks.

It is alleged the talks have been stymied by Honda’s desire to turn Nissan into a subsidiary of the 77-year-old company.

The report says Nissan will formalise its decision to withdraw from its MOU with Honda at a board meeting next week.

Japanese public broadcaster NHK reported that Honda will not accept any integrations unless Nissan agrees to become a subsidiary.

Abandoning the proposed tie-up with Honda is a gamble for Nissan, says NHK, adding “(Nissan’s) outdated product portfolio has forced it to discount heavily in many of its major markets, destroying its bottom line”.

Nissan reported a 94 per cent drop in net income in the first half of 2024 and said it will reduce staff numbers and one-fifth of its manufacturing capacity to reduce costs.

The Japanese firm’s precarious financial situation is unlikely to appeal to potential suitors, the unwinding of its 25-year alliance with Renault – which was upended by the arrest of former CEO Carlos Ghosn in 2018 – a further hurdle in future talks.

Sources told Automotive News that Nissan’s board is pushing Uchida-san and other senior managers to develop a more comprehensive restructuring plan in parallel to discussions with any potential new partner, adding that “the idea of being a subsidiary is unacceptable”, and that “Honda changed the nature of the agreement at the last minute”.

In countering the statement, a Honda spokesperson reportedly said, “the speed of decision making at Nissan was too slow”.

If the merger completely falls apart, some at Nissan are hopeful to revert to a broadly strategic technology-based agreement reached with Honda in March 2024. Such a move would see Honda and Nissan collaborate on areas including software-defined vehicles, shared platforms, and electrification.

A potential reset for Nissan would also allow it to form cooperations with other partners.

With Honda and Nissan each selling fewer than four million vehicles worldwide per annum, analysts say they are each too small to survive by themselves.

Last year, Honda’s sales fell 4.6 percent to 3.81 million, and Nissan’s 0.8 percent to 3.35 million.

Were Honda and Nissan to merge, the duo would match the likes of Hyundai in terms of total output, placing it in third place behind Toyota Motor Corporation and Volkswagen Group on the global stage.

Further updates on this developing situation are expected to be announced on February 13.