The key factor behind the breakdown of the merger was Nissan’s desire to merge with Honda on equal terms by establishing a joint holding company, whereas Honda intended to make Nissan a subsidiary. This fundamental difference in expectations led to an impasse. Nissan believes it has the capability to compete independently, while Honda viewed Nissan’s underwhelming financial performance as a reason to acquire it at a lower valuation. Additionally, Nissan’s competitiveness in the North American market has weakened due to a lack of large vehicle models and sufficient hybrid options, forcing it to rely on frequent price cuts to boost sales. In contrast, Honda has continued to grow steadily in the global market, giving it a stronger bargaining position in negotiations.
Beyond corporate strength, another hurdle was Nissan’s internal management, as some executives wished to maintain independence even after the merger, further complicating discussions with Honda. Now that the merger has failed, what direction should Nissan take in its future strategies?
From the beginning of the Nissan-Honda merger talks, several potential partners had been speculated, with Taiwan’s Foxconn (Hon Hai Technology Group) attracting the most attention. Now that the merger has collapsed, the possibility of a collaboration between Nissan and Foxconn has resurfaced.
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If Nissan seeks to cooperate with Foxconn, it will undoubtedly face several challenges. The first is the cultural gap between the two companies—Nissan is a traditional automaker, and it remains uncertain whether it can adapt to Foxconn’s proposed Contract Design and Manufacturing Service (CDMS) model. Second, there is the issue of Nissan’s brand identity and market positioning—would a partnership with Foxconn dilute Nissan’s brand influence or alter its market perception? Third, the Japanese government maintains strict oversight of foreign acquisitions of domestic companies. If Foxconn attempts to acquire Nissan shares, it is highly likely to face resistance from government agencies and regulatory bodies.
However, Foxconn has already demonstrated strong capabilities in the electric vehicle sector. Through partnerships with the MIH Alliance, Fisker, and Stellantis, as well as the establishment of EV production bases in the U.S. and Thailand, Foxconn has solidified its position in the industry. As a global leader in electronics manufacturing, Foxconn also has a well-established supply chain for batteries, semiconductors, and smart cockpits. If a partnership with Nissan materializes, Foxconn could provide robust technological support. Lastly, Foxconn's substantial financial resources could accelerate Nissan’s EV transition and ease its financial burden by investing in R&D.
For Nissan, maintaining independence remains a priority for its executives, making an immediate partnership with Foxconn unlikely. However, Nissan could reconsider its strategy and explore new collaborative models. One possibility is accepting Foxconn’s technical support without fully selling its shares, allowing Nissan to retain autonomy. Additionally, leveraging shared supply chains and technology partnerships could expedite Nissan’s transformation in the North American market, shorten EV development cycles, and enhance its competitiveness.
In conclusion, Nissan’s immediate future has become more uncertain following the failed merger with Honda. Whether Foxconn becomes Nissan’s new partner or Nissan seeks alternative automotive alliances, the industry will closely watch its next move. In this era of rapid electrification and intelligent vehicle development, Nissan must make swift strategic decisions and seize new opportunities to avoid falling into another financial crisis.