What a Potential Honda-Nissan Merger Could Mean for the Auto Industry

Everyone’s buzzing about Honda and Nissan possibly merging, but let’s clear something up right away: this isn’t a done deal—yet.

Where Things Stand Now

In early 2025, Honda and Nissan signed a six-month agreement to enter formal talks about a potential merger. Think of it like dating exclusively before you get engaged. They aim to finalize a plan by June and begin implementation in August, with the full merger potentially completed by the end of the year.

These discussions didn’t come out of nowhere. Honda and Nissan have been exploring ways to work together for months. It started with a Memorandum of Understanding signed in August 2024, and even earlier, the two companies began collaborating on EV component production after Honda's joint EV project with GM fizzled out.

Is Mitsubishi in the Mix?

Possibly. Nissan owns a 24% stake in Mitsubishi (down from 36% after a recent stock buyback), making them Mitsubishi's largest shareholder. So depending on how things unfold, Mitsubishi could be part of the merger—or opt to go its own way.

What About Renault?

Here’s where it gets messy. Nissan has been in a rocky alliance with French automaker Renault since 1999, when Renault rescued Nissan from bankruptcy in exchange for a major equity stake. That relationship has been strained for years, largely due to clashing business cultures. The French want bold moves. The Japanese prefer tradition. It’s been tense.

Renault’s continued involvement could complicate any Honda-Nissan merger. Renault's biggest shareholder is the French government, which adds another layer of political drama. If Renault thinks a merger will boost Nissan’s value, they might stay in. If not, they could sell off shares—possibly to Honda.

Why Would Honda Want In?

On the surface, it might seem like a strange move. Nissan has been struggling for decades, especially in the U.S. and China. But Honda has some gaps of its own:

• They don’t have full-size trucks or large body-on-frame SUVs, which are key money-makers in the U.S.

• Their EV partnership with GM didn’t pan out.

• Their product lineup has grown stale.

  
  

Merging with Nissan could help Honda fill those gaps quickly, especially in the U.S. market. Nissan already has infrastructure, global manufacturing, and even some unique powertrain tech—like their e-POWER system, which functions like a range-extending EV.

Why Would Nissan Say Yes?

Because they might not have a choice. Their CEO recently admitted the company had only 12 months of financial runway left. Nissan’s global job cuts and production reduction helped a bit, but they need more. Fast. And when Taiwanese tech giant Foxconn reportedly approached Renault to buy into Nissan, Japan was not amused. National pride matters—and Honda, another Japanese brand, is a much more acceptable partner.

Culture Clashes Ahead?

You bet. Honda and Nissan take very different approaches to R&D, production, and sales. Nissan leans heavily on fleet sales and cash incentives. Honda avoids both, preferring special financing and lease offers to maintain resale values.

Their production lines and design philosophies are also radically different. Honda plays it safe. Nissan takes risks. Whether those differences complement or clash will determine whether this merger becomes a success—or a disaster.

What Happens If They Merge?

If the deal goes through, the combined company would be the third-largest automaker in the world, trailing only Toyota and Volkswagen. That scale could help them compete on pricing, secure better supplier deals, and accelerate R&D.

They’d likely continue to sell under separate brands but share technology, platforms, and even powertrains. Expect some model overlap, which could lead to internal competition—just like Hyundai and Kia have been navigating for years.

What Could Stop It?

• Renault: Still a major stakeholder with veto power.

• The Japanese government: They’ll want to ensure the deal protects jobs and the economy.

• U.S. regulations: Antitrust laws could become an issue, especially if Honda and Nissan compete directly in multiple segments.

So, What’s Next?

This merger is far from guaranteed, but it’s very much in motion. Even if it doesn’t result in a full-blown merger, a deeper strategic partnership could reshape the auto industry.

If Honda gets access to Nissan’s production and tech, and Nissan benefits from Honda’s steady leadership and market strength, we could see a resurgence of affordable, reliable, and yes—fun—cars from both brands.

And wouldn’t that be nice?

🎧 Want the full breakdown with all the juicy behind-the-scenes details, boardroom drama, and what this could mean for your next car?

Listen to The Straight Shift podcast episode – I dive deeper into the potential merger, the players involved, and what to watch for as this auto soap opera unfolds.

Stay tuned. It’s going to be an interesting year.