by Key negotiation points
New stage of cooperation
It seems that Honda and Nissan cannot do without each other. Just months after merger talks were called off, Japan’s second and third largest automakers are drawing closer again, this time through plans to join forces in developing cars and powertrains for the American market.
Nissan’s new CEO, Mexican-born Ivan Espinosa, notes that the goal is not another stage of corporate relations that could lead to a permanent alliance, but something more flexible.
We are discussing how we can collaborate in the US,
— he said, hinting that joint product development and common powertrain projects are on the negotiating table.
Progress of negotiations
Espinosa characterized the talks as very constructive and positive, telling Nikkei Asia that teams from both automakers, up to the top management, are meeting regularly.
The CEO, who took office in April after Makoto Uchida’s departure, however, quickly quashed rumors of a revived merger idea.
We are not discussing integration or capital union,
— he emphasized.
Impact of tariffs on strategy
Nevertheless, there is plenty of motivation for cooperation, including software development. The US remains a difficult market, especially after Washington raised tariffs on Japanese car imports.
The rate dropped from 27.5% to 15% in September as a result of a new trade deal, but it is still significantly higher than the pre-trade war level of 2.5%. Nissan expects the new tariffs to wipe out approximately 275 billion yen ($1.8 billion) from its profit this fiscal year, while Honda is preparing for losses of 385 billion yen ($54.2 billion).
Shared resources and competitiveness
Pooling resources on a global level could help both brands remain competitive as the American market cools interest in pure electric vehicles, and Chinese automakers like BYD strengthen their presence in other territories through aggressive pricing.
The good thing is that both companies have very good coverage in the US – manufacturing, supply network, engineering,
— noted Espinosa.
We have many options to explore.
Partnership beyond software
The two companies already signed a partnership agreement in vehicle intelligence and electrification in August 2024, but this new stage of negotiations could go further, potentially leading to co-developed platforms or shared powertrains manufactured in the US.
Espinosa did not specifically mention the prospect of producing Nissan cars at Honda’s North American plants, although that is one possibility.
Nissan’s plans and the future of cooperation
Meanwhile, Nissan is advancing its Re:Nissan recovery plan, cutting 20,000 jobs and reducing its number of global plants from 17 to 10 by 2028.
Despite losses of 221.9 billion yen ($31.2 billion) earlier this year, Espinosa insists that the brand remains flexible:
The world is changing very fast. We are open to any form of cooperation if it brings value to Nissan and its shareholders.
These negotiations are taking place against the backdrop of global changes in the automotive industry, where traditional manufacturers face simultaneous challenges: the transition to electric vehicles, geopolitical tensions affecting trade, and the emergence of new competitors. Cooperation between Honda and Nissan could become a model for other automakers seeking ways to reduce costs and accelerate innovation without the need for a full merger. The success of such alliances could determine the future of many companies in the next decade, especially in key markets like the US.
