It hasn't been a month since two Japanese automakers, Honda and Nissan, officially announced their merger plans, but it appears that it's already facing a major hurdle. According to reports coming from Japan,

Honda executives recently shared insights into their rationale for the proposed merger with Nissan.During a media roundtable at CES 2025 in Las Vegas Honda stressed the urgency to address mounting competition from Chinese automakers,

The problem is there is no likely outcome that would leave both companies and their employees better off than they are today.

The mooted Honda Nissan merger and the fallout from leadership change at Stellantis suggests the auto industry must brace for turmoil, where size is a survival necessity.

Nissan needs to triple its profits by 2026 to be eligible for a merger with Honda.At a joint press conference announcing the memorandum of understanding for the merger, Honda CEO Toshihiro Mibe made it clear,

Honda has announced an agreement to merge with Nissan in a deal worth a reported $54 billion. Mitsubishi, which has long been allied with Nissan, will decide by the end of January 2025 whether to join the venture, potentially increasing the total merger value to $58 billion.

Honda and Nissan are weighing the creation of a joint holding company “amid the dramatic changes in the environment surrounding both companies and the automotive industry,” Honda said. Among the reasons for exploring a merger: Critically examining plants and jobs.

Honda and Nissan’s merger risks failure due to cultural clashes and misalignment. Find out why HMC and NSANY stocks are uncertain investments.

Honda’s chief executive said the move wasn’t a rescue of troubled Nissan.

Nissan now faces an uphill battle to triple its profits by 2026 or risk losing Honda. Honda’s financial stability highlights the stark contrast to Nissan’s weak earnings outlook. Nissan’s cuts haven’t solved its biggest problem,