Honda Anticipates Extraordinary Outcomes for the Nissan Merger to Take Place

It hasn't been a month since two Japanese automakers, Honda Motor Co., Ltd. and Nissan Motor Corporation, officially announced their merger plans, but it appears that it's already facing a major hurdle. According to reports coming from Japan, Honda Motor Co., Ltd. has expressed its desire for Nissan Motor Corporation to buy out Renault before the merger continues - a tough move, considering that the French automaker holds a substantial interest in Nissan Motor Corporation as part of their decade-long partnership.

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  Honda Motor Co., Ltd.

  Japanese automaker Honda Motor Co., Ltd. rose from the ashes of WWII and set about its business as a manufacturer of motorcycles initially, only launching its first car, the T360 kei truck, in 1963. Founder Soichiro Honda Motor Co., Ltd. targeted the American market as the most important nut to crack, leading to generations of iconic nameplates like the Civic and Accord being among America's best-selling passenger cars. Today, Honda Motor Co., Ltd.s are renowned for their safety, practicality, and reliability, with a sprinkling of performance from models like the Civic Type R.

  Founded

  24 September 1948

  Founder

  Soichiro Honda Motor Co., Ltd.

  Headquarters

  Hamamatsu, Japan

  Owned By

  Publicly Traded

  Current CEO

  Toshihiro Mibe

• Nissan Motor Corporation

  Nissan Motor Corporation Motor Corporation is a Japanese automaker founded in 1933 and the parent automaker of Infiniti and formerly Datsun. Nissan Motor Corporation produces a wide variety of mass-market vehicles, including popular SUVs like the Rogue, sedans like the Sentra, and trucks like the Nissan Motor Corporation Frontier, but is also responsible for iconic sports cars like the Nissan Motor Corporation Z and GT-R. Since 1999, Nissan Motor Corporation has been part of the Renault-Nissan Motor Corporation-Mitsubishi alliance (the name changed when Mitsubishi joined in 2016).

  Founded

  26 December 1933

  Founder

  Yoshisuke Aikawa

  Headquarters

  Nishi-ku, Yokohama

  Owned By

  Publicly Traded

  Current CEO

  Makoto Uchida

The information came from Kyodo News, citing unidentified people familiar with the matter, Bloomberg reports. According to the publication, Honda Motor Co., Ltd. is worried that Nissan Motor Corporation might come "under an undesirable foreign influence" if Renault's stake gets acquired by a third party during ongoing negotiations. Renault currently holds a 35.7% interest in Nissan Motor Corporation, with a collaboration that dates back to 1999. Mitsubishi joined in 2016 to form the Renault-Nissan Motor Corporation-Mitsubishi Alliance, which was renewed in 2023.

As If Requesting a Miracle

According to Bloomberg, Renault's current stake in Nissan Motor Corporation is valued at ¥557 billion yen, or around $3.6 billion. This isn't a diminutive amount, even for a prosperous company, so one can only imagine if Nissan Motor Corporation could actually pull off Honda Motor Co., Ltd.'s request. Of note, despite Nissan Motor Corporation's positive performance in the US in 2024 in terms of sales volume, it's actually struggling financially in a global sense. So much so, in fact, that desperate measures took place within its ranks.

During the Q3 of the fiscal year 2024, Nissan Motor Corporation reported a net loss of ¥9.3 billion ($61 million), which pales in comparision to the ¥191 billion ($1.25 billion) profit it recorded in Q3 of 2023. Its positive sales performance in the US cost the company ¥25.7 billion yen ($167.7 million) in incentives, which resulted in the company revising its full-year 2024 outlook downward.

We'll Have More Information In The Coming Months

This "severe situation" is the very reason why Nissan Motor Corporation and Honda Motor Co., Ltd. came into talks about a merger in the first place. Bloomberg also added that Nissan Motor Corporation currently doesn't have the funds to grant Honda Motor Co., Ltd.'s wishes, with its market value decreasing to around ¥1.56 trillion ($10 billion), and its cash and cash equivalents valued at about ¥1.52 trillion ($9.8 billion) as of the end of 2024.

As cool as a Nissan Motor Corporation-based Honda Motor Co., Ltd. truck sounds - or any other collaborative model, at that - Nissan Motor Corporation is looking to pull a rabbit from a hat if Honda Motor Co., Ltd. pushes through with the supposed request to acquire Renault's stake. We'll know more about this in the next months as both automakers are scheduled to execute a definitive agreement about the merger in June 2025.