The Honda-Nissan merger plan is dead.
Good riddance. The news that the two Japanese auto giants were exploring a partnership was surprising and perplexing, with no clear advantage for either firm. Rather unsurprisingly, Nissan is walking away scorned, with Honda unwilling to pursue an equal-parts merger with such a troubled automaker. Yet the company is not walking away empty-handed. The failed courtship was a wake-up call for Nissan’s CEO, who has seemingly realized that the company was sleepwalking toward oblivion.
“Nissan’s overall restructuring plan was being executed slowly,” James Hong, an auto analyst at Macquarie Group, told Automotive News in a new report. “And negotiating with Honda made them realize that.”
Listen, Nissan, I get it. We’ve all been there. You actively become a worse version of yourself, and wonder why you can’t find a good partner. You get close to sealing the deal, only for them to break the news: You’re not ready for a real relationship. You have two options. Say they’re crazy, or buckle down and do some work on yourself. Nissan, it seems, is finally ready to do the work.
Over a decade after introducing the first mass-market EV to the U.S., Nissan hasn’t been able to turn that into a real lead. Its only second-generation EV on sale is the Ariya, and it’s a middling entrant in a crowded class.
Automotive News reports that Nissan CEO Makoto Uchida is pushing forward with more reforms, including cutting 20% of leadership roles, finalizing which factories the company will close and reviewing its partnerships. This is all in response to Honda CEO Toshihiro Mibe publicly saying that a combined Nissan-Honda leadership structure would be too slow and bloated to address the challenges the companies face.
“The far greater concern would be that the integration could progress so slowly that we would fall into a more serious situation in the future,” Mibe said. “Speed is quite important these days.”
Mibe’s solution was elegant, if understandably tough to accept for Nissan: Let Honda be in charge, and make Nissan its subsidiary. Essentially, Mibe was saying “I can fix you,” and Nissan decided it’s better off fixing itself. I respect taking the hard road there. But it’s called the hard road for a reason.
Nissan has a lot to fix. The company’s focus on volume over the last decade left it with a relatively uninspiring lineup, high reliance on fleet sales in the U.S. and a brand more associated with cut-rate finance deals than aspirational products. Despite bringing the first mass-market EV to the U.S., it failed to capitalize on its head start. Its EV lineup here now consists of the outdated Leaf and the middling Ariya, neither of which is selling well.
The second-generation Leaf is just one of the outdated, uncompetitive products you can find at your local Nissan dealer. The good news, though, is that a new one is coming soon.
So Mibe is right. The company is too slow for today’s market, too willing to let products wither on the vine. It has no clearly defined brand image left to capitalize on in the U.S., and faces much stiffer competition in markets like China. It needs to get drastic. Some of that has already happened; It cut 20% of its global manufacturing last year. But bolder moves are needed if Nissan wants to remain relevant for the next decade. If nothing else, Honda taught Nissan that.
Contac the author: Mack.Hogan@insideevs.com.
