Report: Nissan-Honda Tie-up Didn't Makes It to the First Date

Romance was not in the air when Japanese officials attempted to spark a merger between troubled automaker Nissan and its far healthier rival, Honda, a report in the Financial Times claims.

According to three sources, the effort to bring both automakers to the table — a high-level decision apparently originating in the Japanese Prime Minister’s office — went nowhere. Can anyone imagine a reason why Honda would turn up its nose at such an idea?

The attempt to bring both sides to the table for merger talks reportedly occurred at the end of last year, as Nissan floundered amid financial distress born of falling global sales and brash past decisions. The pandemic that came along early this year didn’t help things and effectively buried the idea. The thinking in Shinzo Abe’s office was that the bad blood between Nissan and alliance partner Renault could lead to a split — a danger that risked leaving “the Japanese company exposed.”

Who better to partner with than unencumbered auto giant Honda? Toyota, it seemed, had too many smaller tie-ups on the go already.

Indeed, FT claims the close relationship between Nissan and Renault and the capital structure they both share was a factor in the idea not getting off the ground. Renault owns a 43.4-percent stake in Nissan, with Nissan holding a 15-percent stake in the former company. As well, the French government holds a 15-percent stake in Renault.

It’s reported that the effort to merge didn’t even make it to the boards of either automaker, with Honda rejecting the idea outright. Nissan preferred to move forward with its own attempts to right the ship and repair the alliance.

In May, the automaker released a four-year plan aimed at solidifying Nissan’s fiscal foundation. The plan would see the automaker shrink in global reach and output; alliance partners Renault and Mitsubishi would also tame their ambitions, focusing instead on the markets and products that show the most promise.

As for the kiboshed merger talks, parts and platform compatibility between Honda and Nissan products would have proven another sticking point.

One former Nissan executive told FT, “A Nissan-Honda merger would only make sense to people who do not understand the car industry.”

[Image: Nissan]