After frustrated merger, Honda and Nissan are close to closing a new partnership

A little more than a year after abandoning merger talks, Honda and Nissan are close to announcing a new partnership — this time, more modest. The approach was confirmed by Honda President and CEO Toshihiro Mibe, who told shareholders that talks between the two Japanese automakers are at an advanced stage and close to an announcement, according to the Nikkei Asia newspaper.

The two companies signed, in December 2024, a memorandum of understanding to study the creation of a joint holding company . The plan foundered in February 2025. According to Reuters, Honda began to advocate taking control of Nissan, turning it into a subsidiary, in addition to deeper cost cuts, with layoffs and plant closures – a proposal rejected by the rival.

This time, collaboration should be limited to specific projects. Mibe said that the companies advance “in each project in a win-win relationship”, without detailing the scope. One of the initiatives under discussion is the joint development of electronic control units (ECUs) for future hybrid and electric models – a project that would also involve Mitsubishi and would bring standardized parts for the three brands in cars scheduled for the end of the decade.

Renault, in turn, should have a voice in the negotiations: the French company still holds 15% of Nissan’s voting capital, a share that was already 43% in 2023. The move comes amid a broad restructuring of the two Japanese companies. Under the RE:Nissan plan, Nissan plans to close seven plants, close two design studios, lay off about 20,000 employees and reduce annual production capacity from 3.5 million to 2.5 million vehicles.

Honda is also reviewing its strategy after posting its first annual loss since its IPO in 1957 — a net loss of about $2.7 billion in the fiscal year ended in March. The fall was driven by billionaire writedowns in the electric business, in the face of weaker demand in the United States, where subsidies have been cut, and Chinese competition. Even so, the automaker projects to return to the black in the current year.

The company canceled part of its investments in electric vehicles, abandoned the goal of becoming an all-electric manufacturer by 2040 and started to focus efforts on hybrids, with the promise of 15 new models by 2030 and a sedan and SUV duo scheduled for 2028. Behind the scenes, it is precisely the advance of Chinese brands that pushes traditional manufacturers to share costs and accelerate the development of new models.