Inside Honda and Nissan's $58B Fight for Survival, The 90-Day Timeline That Could Change Everything

The automotive world, long-simmering under the pressure of China’s EV dominance, erupted in December 2024 when Honda and Nissan, Japan’s second and third-largest automakers, announced a historic merger plan. The goal? To form a $58 billion behemoth by August 2026, trailing only Toyota and Volkswagen in global sales. 

Mitsubishi, Nissan’s alliance partner since 2016, was invited to join but remained noncommittal, preferring “partnerships over full integration”. The catalyst? In an existential crisis, Chinese automakers like BYD and Nio had devoured market share, while Tesla’s software-driven dominance left Japanese giants scrambling. Honda CEO Toshihiro Mibe framed it as a war for survival,

“We must build capabilities to fight them by 2030. Otherwise, we will be beaten”.

Lessons from the Past

• Fiat S.p.A. acquired the remaining shares of Chrysler Group LLC, leading to the formation of Fiat Chrysler Automobiles. This merger combined Fiat's European market strength with Chrysler's North American presence. 
• PSA Group, the parent company of Peugeot and Citroën, purchased Opel and Vauxhall from General Motors. This acquisition expanded PSA's footprint in the European market.
• Tata Motors, an Indian automotive manufacturer, acquired the British luxury brands Jaguar and Land Rover from Ford. 

The Ghosts of Carlos Ghosn, Nissan’s Downfall

Nissan’s decline was no secret. Once a titan under Carlos Ghosn, its empire crumbled after his 2018 arrest for financial misconduct and subsequent escape to Lebanon. By 2024, Nissan’s net profit had plunged 94%, forcing 9,000 job cuts and a 20% production reduction. Ghosn, ever the provocateur, lambasted the merger as a “desperate move” from his Beirut exile,

“They are strong in the same fields. Weak in the same fields. Duplication everywhere”.

Honda, meanwhile, stood comparatively robust, its motorcycle and hybrid divisions buoying profits despite China’s EV onslaught.

December 23, 2024, vTokyo’s MOU, Setting the Merger in Motion

On a frosty Tokyo morning, Honda and Nissan signed a memorandum to unify under a holding company by 2026. Mitsubishi was given until January 2025 to decide its role. The plan? Share EV batteries, autonomous tech, and production lines while retaining brand identities, a delicate dance of cooperation and competition. Honda would lead the board, a concession to its financial stability. Nissan CEO Makoto Uchida, his salary halved amid restructuring, struck an optimistic tone,

“We hope to grow together rather than one leaning against another”.

January 2025, Merger Delays and Restructuring Challenges

By January’s end, cracks emerged. Honda delayed its merger roadmap, demanding “more aggressive” restructuring from Nissan. Analysts noted Nissan’s Herculean task: generating $2.6 billion by 2026 despite a 93.5% profit nosedive. Mitsubishi, sensing turmoil, began leaning toward independence, opting for “limited collaborations” instead. The merger’s architect, Mibe, reiterated,

“This is not a bailout. Nissan must stand on its own feet”.

Mitsubishi’s Deep Ties to Asian Car Culture

• Mitsubishi's involvement in rally racing began in 1967, and the company became a prominent competitor in the World Rally Championship (WRC) after its inception in 1973. The Mitsubishi Lancer Evolution series, introduced in 1992, became iconic in the rally world, with models like the Evo VII WRC debuting in 2001. 
• Starting in the late 1970s, Mitsubishi established a long-standing relationship with martial artist and actor Jackie Chan. This partnership led to Mitsubishi vehicles being prominently featured in many of Chan's films, effectively serving as co-stars in high-speed chases and action sequences. 
• The collaboration extended beyond movies, with Mitsubishi supporting Chan's racing endeavors, including the Jackie Chan Cup in 1984. Mitsubishi's collaboration with Jackie Chan significantly boosted its brand recognition in China. By featuring its vehicles in Chan's films, Mitsubishi effectively marketed its cars to Chinese audiences, leveraging Chan's popularity to establish a strong foothold in the Chinese automotive market.

February 2025, Merger Crisis and Market Reaction

As February 2025 dawned, reports swirled that Nissan might abandon talks. Kyodo News revealed Honda had floated a subsidiary proposal, met with “vehement opposition” from Nissan’s rank-and-file. Shares plunged 5% for Nissan, while Honda’s surged 8%, a market verdict on who held leverage. Mitsubishi, meanwhile, edged closer to exiting entirely, prioritizing its stock listing. The once-grand vision teetered, with both sides postponing detailed plans to mid-February.

Honda’s Leverage, A Plan To Dominate 

Honda’s dominance in this dance mirrors Ford’s hypothetical leadership in a GM-Dodge merger. With $7 billion in stock buybacks and hybrid tech prowess, Honda wielded Nissan’s desperation like a puppet. Mibe’s ultimatum—“Nissan’s turnaround is a precondition”, echoed Henry Ford’s ruthless pragmatism. Yet Honda needed Nissan’s EV patents and truck platforms (e.g., the Armada SUV) to counter China’s. As Sam Fiorani noted,

“Nissan brings segments Honda doesn’t play in”.

Mitsubishi, The Reluctant Third Wheel in the Merger Dance

Mitsubishi’s ambivalence stemmed from its own scars. Burned by past alliances (see: the 2000s DaimlerChrysler debacle), it preferred partnerships over absorption. CEO Takao Kato hedged,

“We will explore synergies without joining the merger”.

Its 1 million annual production paled next to Honda and Nissan, but its Southeast Asian foothold offered strategic value. 

Honda’s Enduring Legacy and Cultural Impact

• Established in 1948 by Soichiro Honda in Hamamatsu, Japan, Honda began by producing motorized bicycles to address transportation needs in post-war Japan. The company's innovative approach led to the creation of the Honda Super Cub in 1958, which became a cultural icon and solidified Honda's reputation for reliable and affordable transportation. 
• By 1959, Honda had become the world's largest motorcycle manufacturer, a testament to its rapid growth and the global appeal of its products. Despite its international success, Honda maintained a strong domestic presence, contributing significantly to Japan's economy and automotive industry. 
• Beyond manufacturing, Honda has been an integral part of Japanese culture, from its participation in motorsports to its influence on automotive design and technology. The company's commitment to innovation and quality reflects core Japanese values, reinforcing its status as a national symbol of industrial excellence.

The Existential Threat

The merger’s urgency was rooted in China’s EV tsunami. BYD’s sales dwarfed Nissan and Honda’s combined, while Chinese labor costs undercut Japanese rivals by 30%. EU tariffs on Chinese EVs (up to 45%) provided scant relief. Mibe’s analogy was stark,

“The structure of the automobile industry is changing. We are dinosaurs in an asteroid winter”.

The Merger’s Uncertain Future

As of February 2025, the merger’s fate hangs by a thread. Nissan’s debt cliff looms in 2026 and Honda’s patience wears thin. Mitsubishi’s exit could fracture the triad, leaving Nissan to face Foxconn’s predatory advances alone. Yet if successful, this alliance could redefine global auto politics. For Nissan and Mitsubishi, survival now hinges on swallowing pride or being swallowed whole.

Images Sourced by Honda, Nissan and Mitsubishi news room.

Noah Washington is an automotive journalist based in Atlanta, Georgia. He enjoys covering the latest news in the automotive industry and conducting reviews on the latest cars. He has been in the automotive industry since 15 years old and has been featured in prominent automotive news sites. You can reach him on X and LinkedIn for tips and to follow his automotive coverage.