Nissan, Honda to end merger talks as tech giant Foxconn looms

Nissan was willing to merge with bitter rival Honda because it avoided the one thing they hated more. Now, Nissan might have no choice.

A breakdown in merger negotiations between Nissan and Honda could lead to the very situation Nissan was trying to avoid - being taken over by a Taiwanese smartphone builder.

The Japanese giants announced intention to merge in December following a difficult period for Nissan, which already promised to slash costs, jobs, and production levels to stave off bankruptcy.

A deal with Honda was seen to be preferable to several alternatives, including a takeover by Taiwanese electronics giant Foxconn, a company that builds sophisticated gadgets including Apple’s iPhone.

Several financial publications have cited unnamed sources as saying the merger between car makers is off because Honda sought a level of control that Nissan management found unacceptable.

MORE:Nissan to walk away from $93 billion merger

Makoto Uchida, president and CEO of Nissan, and Toshihiro Mibe, director, president and representative executive officer of automaker Honda. Photo: Richard A. Brooks / AFP

Nissan has already announced plans to slash production, slash costs and reduce its workforce in a bid to stay alive.

It held a joint press conference with Honda in December, when the carmakers expressed intentions to merge and create the world’s third-largest car company.

But the Wall Street Journal reports that “Nissan’s board has determined that Honda’s terms for a combination of the two automakers are unacceptable”, with Honda insisting it would have control over the joint concern.

The Financial Times says Honda told Nissan “the new offer was ‘take it or leave it’, which they could not accept for fear of losing decision-making power and their brand being weakened under Honda management”.

MORE: Nissan and Honda to merge in ‘desperate move’

Nissan is in a difficult position.

Reuters reports “Nissan is now open to working with new partners, including technology companies, as it looks to navigate the technological upheaval brought by electric vehicles, software-driven cars and new, fast-moving Chinese manufacturers”.

Nissan-Honda merger talks have been complicated by growing differences, multiple people familiar with the matter have told Reuters, and hit a wall after Honda said it wanted to turn Nissan into a subsidiary https://t.co/r3VuyhczBnpic.twitter.com/hrlDx2U9zB

— Reuters Business (@ReutersBiz) February 6, 2025

Apple iPhone manufacturing partner Foxconn is a leading candidate to link with Nissan.

The Asia Nikkei says a tie-up with Nissan would enable Foxconn “to build a formidable EV supply network in Asia” and that “Foxconn’s and Nissan’s business strategies share common traits”.

Some commentators are suggesting that Foxconn could take over Nissan with minimal co-operation from the auto giant’s leadership.

MORE: Nissan looks to avoid Foxconn takeover

Foxconn founder Terry Gou with its electric Model B concept.

Australian automotive commentator Glenn Butler of The Auto Exec said Honda’s strong negotiating tactics could be a strategy to help it wiggle out of the deal in “a ploy for its own escape”.

“To me this latest threat feels like posturing by Nissan’s negotiators, pushing for the best deal,” he says.

“Which is their job after all.

“Nissan wants to save face at a time when it has precious little left.

“Negotiating from a position of weakness is never good, but as everyone knows, the trick is to appear stronger than you really are. But the reality is: Nissan needs Honda. Or if not Honda, somebody else.”

Originally published as Nissan, Honda to end merger talks as tech giant Foxconn looms