Renault has cautiously weighed in on the Nissan-Honda merger announcement, saying it “will considers all options based on the best interest of the Group and its stakeholders.” The French carmaker acknowledged the announcements made by Nissan and Honda, “which are still at an early stage,” and will continue to execute its strategy and roll out projects to create value for the Group, including those already initiated within the Alliance.
Renault owns 17% of Nissan and 18.7% via a French trust, making it Nissan’s top shareholder with 35.7%. Just days prior, Nissan and Honda signed a memorandum of Understanding (MoU) to explore a merger, which observers see as a strategic move to pool resources to stand up to fierce Chinese competition and assist the struggling Nissan. The two companies aim to finalize the terms of their merger, including the share transfer plan, by June, with Mitsubishi expected to make its decision on joining the deal by the end of next month. Currently, Nissan owns 24% of Mitsubishi.
Industry reactions continue to pour in as Carlos Ghosn, the former Nissan-Renault CEO, expressed skepticism about the merger. He predicts Nissan will suffer under Honda’s dominance should the merger materialize. He described the collaboration as nothing less than “a corporate slaughterhouse where Nissan is the unlucky lamb,” emphasizing Honda’s likely takeover of board nominations and control.
“Nissan is panicking, searching for someone to rescue them,” Ghosn told CNBC. Indeed, he believes Honda will be calling the shots following the merger, citing the stark disparity between their respective market capitalizations—Honda’s being almost four times larger than Nissan’s.
Describing the proposed partnership as lacking complementarity, Ghosn stated, “If they want to make synergy, it is going to be through maybe cost reduction, duplication of plan, duplication of technology, and we know exactly who’s going to pay the price of it. It’s going to be the minor partner, and it’s going to be Nissan.”
Despite Ghosn’s cautious outlook, Honda's CEO Toshihiro Mibe remains assertive about the potential merger, labeling it as “a once-in-a-century opportunity” for strategic bold action necessary to adapt to the rapidly changing automotive environment. This sentiment was echoed by Nissan’s CEO Makoto Uchida, who highlighted the potential for “significant synergies” across various areas, including innovation and manufacturing.
Should this collaboration proceed, it could create the world’s third-largest automaker by vehicle sales, only trailing Toyota and Volkswagen. The automotive sector is already undergoing drastic shifts, transitioning from petroleum-based energy sources to electric vehicles (EVs). Honda, Nissan, and Mitsubishi are recognizing the urgent need to address these challenges.
Former CEO Ghosn has shared his concerns about Nissan’s ability to recover, especially following the announcement of restructuring which includes plans to cut 9,000 jobs and reduce global production capacity by 20% to become “leaner and more resilient.” He argues this difficult climate makes the merger even less likely to succeed.
The uncertainty surrounding the prospective merger remains palpable within the industry. While Honda and Nissan are moving forward with plans, the looming participation of Mitsubishi adds another layer to the discussion, which will conclude with their decision expected early next year.
Notably, Ghosn continues to voice his “high doubts” about Nissan’s capability to regain stability, denoting the need for swift and decisive action—something he feels has been sorely missed. Observers will be closely watching how stakeholders react as this potential merger could reshape not only Nissan and Honda’s futures but also the entire automotive market, particularly amid rising competition from burgeoning Chinese car manufacturers like BYD and SAIC.
