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,

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.

Honda, Nissan, and Renault's merger may take on a new direction, per Bloomberg. According to the outlet, Honda is worried that Renault, which owns about 35 percent of Nissan, may be bought up by a third party while the deeply complex merger works its way toward completion.

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,

To hit this target, Nissan will need to rake in approximately 400 billion yen in fiscal 2026—roughly $2.6 billion at current exchange rates. That’s a tall order, especially considering Nissan’s operating profits plummeted by 90.

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

Honda and Nissan have signed a memorandum of understanding (MoU) to start discussions that could pave the way for a merger of the two companies.

Honda is eager to ensure there's no foreign influence on its merger with Nissan, especially since Taiwan's Foxconn has been eyeing the ailing brand

Nissan is facing critical financial and competitive challenges, with operating profits dropping 90% and net income falling 94% in the first half of fiscal year 2024 compared to the same period a year earlier.