The merger did seem like a good idea at first, but neither companies were actually interested.
Nissan had a pretty good relationship with Renault until Carlos Ghosn was found guilty of numerous charges of financial misconduct. Given that Japan wants a strong auto industry, this situation irked the authorities, which led Japanese officials to push for a merger between Nissan and Honda. If it happened, this would’ve been a very bold power move.
However, the official’s desire to make a dominant automobile giant will probably never gain ground. There is no denying the fact that the Japanese auto industry isn’t the powerhouse it once was. In recent years, Chinese automakers pushed the industry forward with electrification, and there is also Tesla lurking in the shadows.
This is happening at a time when the Japanese companies are trying to maintain the stronghold on the market. Some of those companies chose to do that with the help of mergers and collaborative efforts. Toyota, for example, works with Subaru and Suzuki on electrified propulsion.
The Carlos Ghosn incident caused friction between Nissan and Renault. The two companies’ relationship has been on the downfall ever since the arrest took place. There is also a sense of fear because of the ongoing pandemic crisis. And yes, there were talks between Nissan and Honda executives. However, they already made it clear that splitting is not a viable option.
Even the PM of Japan, Shinzo Abe, provided direction for the merger at the end of last year. With such political and commercial support, the companies still couldn’t reach a consensus. When you think about it, a merger between Honda and Nissan is simply inconceivable.
Honda Motors, for instance, is still an independent company and doesn’t collaborate much with others. Moreover, they make most of their chunky shares by manufacturing and selling bikes and engines.
Meanwhile, Nissan is willing to sort out any corporate differences with Renault. That’s because, despite the differences, both companies worked very well together in the past.
Also, a Nissan executive mentioned that the merger would seem like a masterstroke only to people who don’t understand the industry.
Honda ranks as the third-largest Japanese automobile manufacturer right before Nissan and Toyota. Nonetheless, Honda has a much more diversified product portfolio than Nissan. Owing to that, the company has other means of making money than just cars, unlike Nissan.
Honda has also already diversified its manufacturing by including eco-friendly hybrid vehicles. That’s something Nissan is struggling right now, despite the push for electrification.
Ultimately, Honda and Nissan share different visions and have a different company culture, different fan base, different target demographic, etc. The companies are distinct in many ways, which makes the merger even more unlikely.
