Nissan’s $50 billion merger with Honda fell through earlier this year after public reports of a merger were on the table back in December of 2024. The merger could have made them the third biggest automaker based on total annual sales, as noted by PBS. With the merger falling through, former CEO Makoto Uchida stepped down and was promptly replaced with Chief Planning Officer Ivan Espinosa, as reported by Reuters. What’s next for the company?
There are already talks that Nissan could seek to enter into re-negotiations for yet another merger, this time with more favorable terms on their end. The original deal fell through because Honda wanted to bring Nissan and its subsidiary Mitsubishi under its umbrella as subsidiaries. Nissan’s management was not keen on anchoring the company under Honda as a subsidiary. The terms of governance led to the merger’s dissolution, as Honda wanted a controlling stake in the merger, and Nissan’s executives, led by Uchida at the time, did not want to cede all control to Honda.
Merger Fallout: Nissan’s Immediate Response
With Uchida out of the picture and Espinosa having taken control, talks of a merger are now back on the table, but the threads are thin. According to Transportation & Logistics International Magazine, Nissan may explore a partnership with Foxconn to leverage the tech giant’s resources for hybrid and electric vehicle (EV) production. The idea is that Nissan still wants to maintain some semblance of autonomy in the merger while still pushing forward with producing and innovating in the automotive space.
However, with the company in its present state, retaining autonomy may have to be taken off the table if they simply want to survive in the current market climate. The landscape is extremely volatile right now, and Nissan’s current strategy may not ensure long-term sustainability. Hence, this has led to Autoblog speculating about Nissan having a second go-around with a Honda merger now that a leadership change has commenced, potentially giving Honda what they want. Is that really what’s best for Nissan?
Nissan’s Financial Struggles
The company has been struggling financially for years. Uchida took over during a troubling period that only seemed to get worse. The lack of revitalization of the brand during and coming out of the pandemic only further hurt Japanese automakers, with the stock practically going into freefall shortly after Uchida stepped in as CEO in 2019. 2021 saw a very brief spike that continued through 2022, but things kept tumbling as sales failed to reignite widespread consumer interest, and segment competitors continued to pull ahead. This culminated in one of the worst-performing moments in the company’s history in the fourth quarter of 2024, leading into the equally abysmal first quarter of 2025, where they recorded a near 25% drop in market performance over the five-year period, as noted by Yahoo Finance.
Why are the stocks down, and why is Nissan struggling financially? The obvious answer is because sales are down. Dealerships have reported around 70% loss of profits in year-over-year tracking from 2023 to 2024, as reported by Motor1, and the troubles started well before then. The BBC reported how a scandal of alleged fraudulent mishandling of assets from those running Renault, Nissan’s partner, rocked the company in 2018. This was coupled with a nearly 2% drop for Nissan’s market share in total North American car sales over a five-year period. Some market analysts believe that another big problem is that Nissan is suffering from over-saturating the market with dealerships. Nissan reportedly has more dealerships than some of its automotive competitors, yet it is not selling as many vehicles.
Industry Experts Believe Nissan’s Salvation Is In Hybrids
Some market analysts believe hybrid vehicles will turn things around for the Japanese automaker, but that doesn’t help them in the interim. The hybrid Nissan Rogue, one of Nissan’s most popular models, is expected to receive a hybrid iteration as a 2026 model year, joining Nissan’s all-electric LEAF and ARIYA as part of its alternative fuel lineup. It’s still a long time to sit in the trenches and suffer losses, quarter after quarter, while attempting to rely on a single new PHEV to save the day. That’s why the merger with Honda was such a big deal. It would have provided an influx of interest and cash flow while Nissan retools their line-up.
Industry analysts believe that once Nissan pumps out more hybrids and perhaps reduces the number of dealerships spread across North America, the company could rebound, or at least flatten the curve (which would be a huge boon compared to where they are now). But is that enough? Another compact or midsize hybrid might seem like a good move to spark interest, but it would be arriving late to the rather crowded automotive party.
Potential Strategies For Recovery: Untapped Markets
Instead of relying solely on the hybrid SUV route, Nissan could try to tackle varying segments that aren’t oversaturated. Toyota, Honda, Chevy, Ford, BMW, GMC, and Kia have vehicles from subcompacts up to full-size offerings in almost every major segment, especially within the SUV category. These range from utilitarian and economical to spacious and luxurious. Instead of competing directly in segments full of highly popular choices, one route could be to focus on alternative fuel vehicles in segments that aren’t crowded.
Hybrid coupes or personal luxury cars aren’t being pursued, the latter of which is a long-abandoned segment that could see a proper revival with the right design. A Nissan Z-inspired off-road subcompact might be an interesting route to take. Another possible direction is a truck variation in the alternative fuel segment. Ford saw big interest in the hybrid Ford Maverick. A Nissan Frontier that goes the hybrid route with a sportier design could also help revitalize interest for those looking for a hybrid compact pickup.
High-performance full-size SUVs are rare, with few automakers focusing on catering to that segment. Nissan could combine the popularity of its performance-driven models with its full-size offerings, such as the Armada, especially with a hybrid electric motor setup. The options vary, and the nameplates and opportunities at Nissan’s disposal are plentiful, especially when you add Mitsubishi.
The only question is whether they will go the safe route or experiment with something different to capture an untapped audience? Similar to how Kia went after the young crowd looking for something hip and economical, with highly stylish yet very practical designs, or how Tesla targeted those looking for sleek, futuristic electric sedans and subcompact SUVs, or how Rivian focused on electric full-size performance vehicles in the truck and SUV category. For Nissan, they have experience and the nameplates to leverage. It just depends on what route they decide to take.
Can Nissan Capitalize Before It’s Too Late?
Having opportunities is one thing, but executing a sound plan in a viable market space is a completely different topic. Retooling their manufacturing process or developing new designs for existing nameplates as alternative fuel iterations requires a lot of engineering, testing, and logistics for deployment. It could take years to have a viable slate of new models ready to compete in the marketplace. This leads to whether Nissan can find another partner for a merger, retool their line-up, and produce worthwhile vehicles before it’s too late. The company is definitely in an interesting position, and in the coming years, we will see how it navigates these turbulent waters following the failed merger with Honda. Even if it begins to make the changes and find a suitable merger, will it be enough to stave off collapse in the short term?
