Honda President Takes a Stand on Nissan Issue

No matter how you spin the topic, only one question comes to mind… What is Honda doing in this mess?

Honda CEO Toshihiro Mibe found himself in a rather embarrassing situation when justifying a possible merger with Nissan. When asked what makes Nissan a good partner, his terse response, “It’s hard to say,” elicited awkward laughter from the journalists present.

This reaction reflects the widespread skepticism surrounding this unexpected alliance. Honda and Nissan, two manufacturers struggling in different areas, may be hoping to combine their forces to stay competitive. But is this really a strategic merger or a desperate act?

Although Honda is in better shape than Nissan, it faces challenges, particularly in the electric vehicle market. After a failed partnership with General Motors, the brand is counting on its first autonomous EV, expected next year, to turn things around. Nissan, for its part, is in a precarious situation with disorganized finances, a weakened dealership network, and an EV lineup dominated by the aging Leaf and the unpopular Ariya.

So why would Honda partner with Nissan, whose survival might depend on intervention from the tech giant Foxconn? Some believe the Japanese government encouraged this merger to prevent foreign takeover, much to the delight of Carlos Ghosn, former Nissan CEO, who hastily emerged from his media silence to call the project “Carnage.”

Yet Nissan offers some assets: a strong industrial network, influence in Southeast Asia, and modest progress in electrification with the small EV Sakura. On the other hand, Honda could accelerate the modernization of Nissan’s powertrains. But the road is long. Analysts estimate it will take at least three to five years for this merger, if it materializes, to bear fruit. And if even Mibe cannot justify this choice, we are right to wonder whether Honda is embarking on a journey without oars or a compass.

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