How Nissan and Honda's $60B merger talks collapsed
63 comments
·February 12, 2025alephnerd
Apocryphon
What about Mazda?
Reubachi
TLDR; Mazda should merge with Nissan while they still can do it on a fire sale.
Mazda is a huge outlier in manfacturing because they are small, but have motorsports calibre/history (meaning they have a history of homologating sports cars.)
Mazda sells an order of magnitude less cars than even newer companies like BYD. Even less than isuzu. Because of this, they can more tightly control investor expectations, profit/loss. The stock value rarely changes, nevermind grows, so investors are confident in stability and dividends.
AKA, if you work at mazda, you aren't gonna be seen as a mega rich engineer. If you invest in mazda, you know you're gonna be able to sell at any point without much worry.
That said, I see no future for mazda beyond acqusition by chinese firm. It Manufactures in far too high COL countries, sells for too cheap, Self cannabalizing (9 different SUV models), too tight of a CUV market, lack of brand identity.....and the biggest issue, they cannot afford to r and d another miata gen, another RX-7,8 gen.
mazda desperetely needs a cash infusion, or joining into a much wider network with more selling power. Until then, I fear they will coast down the same road as Mitsubishi in the us.
laurencerowe
Mazda seems to be doing pretty well selling SUVs in the US though with growing sales and its highest US market share since 1990.
https://www.automotivedive.com/news/mazda-boosts-us-market-s...
csours
At this point I feel like a rising stock price after a crisis should be a major red flag for long term corporate survival.
Carlos Ghosn was able to "turn Nissan around", but it was at the expense of future product capabilities (in my opinion) [Disclosure I work for GM, this is solely my own opinion]
Also, I must say that it is not clear to me that anyone could know what a long term winning play looked like 10-15 years ago when the damage was done (in my opinion). It takes a lot of effort and money to make a mediocre automobile, it takes a lot more to make a high quality automobile.
orwin
Under Goshn and his close early advisors, Renault-Nissan started working on EVs, launching the Leaf and Zoé. Early, he also managed to streamline production of the two companies, and started to implement management changes that let some workers have more autonomy.
The issue is that power got to his head and truly believe he was the second coming of Jesus or something, and stopped improving his companies to rub shoulders with the Nepo CEO/aristocrat crowd. Had he continued the push toward affordable EV, Nissan could have been BYD, but R&D stopped, for no visible reason.
My personal theory is that the fallout from his divorce estranged him from his early friends and his closest advisor (his wife) and idiotic sycophants made him believe he was above the law and deserved even more. I've heard a lot of good things about pre-2008 Goshn, from people who aren't usually glazing billionaires, so maybe I'm biased.
csours
> My personal theory is that the fallout from his divorce ...
Yes, I've noticed that people having nasty public fights with family members can lead to extremely negative effects on decision making.
timewizard
> At this point I feel like a rising stock price after a crisis should be a major red flag for long term corporate survival.
It depends. If you see a lot of insider buying after a bottom it can be a good sign that there's strong internal faith in the companies future. I've used it as a buy signal myself before when a market cap is high enough. It has paid off.
> it is not clear to me that anyone could know what a long term winning play looked like 10-15 years ago
Well it probably _wasn't_ partnering with a Chinese state company to try to expand the brand there. That was a poison pill.
alecco
Japanese carmakers are going to become irrelevant [1] unless there's a major change. But that's very unlikely due to:
1. Supply chains and key raw materials mostly controlled by China
2. Japan's demographic collapse
3. Japanese Gen Z fed up with an unwinnable rat race where they live to just pay rent and groceries
[1] https://carnewschina.com/2025/01/13/byd-surpass-toyota-in-ja...
onlypassingthru
Irrelevant to whom? Toyota, Honda and Subaru all have lifelong customers and for good reason. The cars often last for 20+ years with minimal upkeep.
The current crop of Chinese electric car makers are all trying to fake it until one of them makes it and the money spigot keeping them afloat will eventually get turned off at some point.[0] Good luck keeping that flashy EV running when the company goes bust.
[0]https://www.businessinsider.com/chinese-evs-losses-widen-des...
potato3732842
All cars last 20+yr if you give a crap unless they have some fundamental engineering or execution Achilles heel (ecoboost water pump, Toyota frame rust, Hyundai engine problems, etc) that will manifest as a comically not-economical repair when the vehicle is old enough in age to be of fairly low value.
Premium cars that aren't so premium as to be disposable (i.e. not a luxury car you're gonna trade in every 3-5yr like clockwork) always last really well because people who can afford nice things can generally afford to maintain them.
This is pretty clearly borne out when you compare same cars across brand e.g. Ford Lincoln Mercury panther platform cars) or look at the exceptions like all those objectively terrible northstar caddilacs and v12 Jags and whatnot that are in impeccable shape because they got used and maintained nicely for a decade before being "retired" to the garage of the owner's vacation property on Cape Cod or perhaps the Hamptons or compare airport people moving vans that were retired to church group service to work vans that got sold down the river to even harder service.
It's really easy to "well we really should sell a water pump while we're in here for your 100k timing service" on a Subaru owned by someone who can afford a Subaru vs selling a preventative transmission fluid change to the guy who could barely scrape together the down payment on a Sentra.
I'm being a little sloppy and leaving some loose ends and room for nitpicking jerks to wedge in but I think the point here is pretty clear.
r00fus
Amazing you feel that EVs are somehow more maintenance than ICEs. There exist EVs that have never had any manufacturer/dealer input since the day they rolled off the lot.
Tesla/Nio are a bad examples - many EVs were built to be sold and essentially ignored by the manufacturer.
onlypassingthru
After that EV company goes out of business, how are you going to replace that bespoke {$random_part} that broke? Any Fisker Ocean owners want to chime in?[0]
tpm
They have lifelong customers, but those also don't live forever and can change their opinion, and if the carmakers don't adapt, they won't survive. For the last 19 years we have been buying Toyota, but I'm slowly starting to look for a new car and it has to be an EV and Toyota is currently very underwhelming in that regard in our market.
formerly_proven
There's one graph that basically predicts which countries are going to fail and which are going to prevail. It's the graph that shows how many people in the "doing things" age bracket a country has.
Compare these:
(germany) https://population.un.org/wpp/graphs?loc=276&type=Probabilis...
(alternatively, Europe as a whole) https://population.un.org/wpp/graphs?loc=908&type=Probabilis...
(Japan) https://population.un.org/wpp/graphs?loc=392&type=Probabilis...
(China) https://population.un.org/wpp/graphs?loc=156&type=Probabilis...
to this one
(US) https://population.un.org/wpp/graphs?loc=840&type=Probabilis...
A key aggravating factor is most countries in the first group have stagnating productivity and the country in the second group has raising productivity on top. This creates a compound advantage for the country in the second group.
It seems likely to me that there is almost no degree of anti-national behavior the government of that country would need to exhibit or no amount of country-eroding policies that could forfeit this fundamental advantage. They'd need to get their country literally nuked or something similarly catastrophic.
petra
Assuming a decent AI and robotics, is a lot of working age population still a good thing? Or just more mouths to feed?
vpribish
not often a comment here makes an impact like that. wow - holy crap.
morkalork
Canada doesn't feel like it's winning despite what the graph says*. Bringing in tons of working-aged immigrants has caused housing (and other living) costs to explode, which in turn has lead to less people having children, which leads to more immigration to fill the gap and the whole thing has been spiraling. Not fun at all.
* https://population.un.org/wpp/graphs?loc=124&type=Probabilis...
cayleyh
The problem with just "living by the graph" is that it ignores whether the country has the capacity to provide basics like food, clothing, shelter, and employment to the population. You need to have both to have the working-age population be able to engage productively in the economy.
The problem Canada created is that it tried to reset it's population graph without ensuring that there was an adequate supply of said basics, and in many instances (housing, food prices) had policies that actively undermined what needed to a happen to support a rapidly expanding population. JT and the other liberal leadership read the Century Initiative and all they took away as "we need 100m people!" (https://en.wikipedia.org/wiki/Century_Initiative)
It's not that a country couldn't theoretically be successful resetting their population graph through immigration, but that they would also have to do things that would cause housing prices to fall or more competition (ie less corporate profits) in the other sectors to absorb the extra demand generated -- 2 things Canada has been absolutely unwilling to do in any meaningful until late last year.
thomassmith65
Immigration is no excuse for the Canadian housing shortage. Canada is one of the world's largest land masses, and - even in its South - mainly uninhabited.
greenavocado
Canada is a Calhounian behavioral sink except they stave off the extinction by importing.
Summary with links to various publications at the end: https://notwokedot.com/wp-content/uploads/2024/07/The-Behavi...
alecco
It is an important variable. But a more realistic picture needs to factor in:
1. median IQ
2. skills
3. future unfunded liabilities (welfare, pensions, public health, etc)
I hope China learns this lesson an makes some changes. At least they have a bit more runway to do so.
bearjaws
IMO a Honda Nissan merger would have been terrible for Honda.
Nissan is clearly an anchor, and acquiring it would have just dragged Honda down .
VectorLock
Its too bad since Honda has seemed to have totally lost its luster the past decade or so. Honda was Apple to Toyota's Microsoft for a long time, now their cars are bland and undifferentiated, rather than the innovative leaders they used to be.
Grazester
Funny that's what those Nissan CVT's and variable compression engines are only good for, anchors.
numpad0
This merger deal was a strange one. Honda CEO on stage wasn't sure why he was there, unnamed Nissan exec reportedly remarked "good riddance" to the deal falling through, ex-Nissan Foxconn exec expressing interest and Foxconn CEO eventually declining through the press, and so on.
Whoever was pushing it for whatever reason, basically none of involved parties were interested in it, other than that everyone agreed that hypothetically combining Nissan and Honda would create some accumulated capitals.
tahoeskibum
Nissan, Honda & eventually Toyota are going to go the way of Nokia/Motorola after iPhone came out. Cheap and reliable Chinese EVs will take over the market (like Android), while Tesla will probably maintain a halo premium product like iPhone.
mongol
Tesla is going down the drain, at least in Europe, unless shareholders evict Musk. Nothing iPhone-like with that brand anymore.
r00fus
Not just Europe: CA sales are down double digits recently as well: https://www.newsweek.com/tesla-california-sales-decline-elec...
user3939382
This sounds like political venting more than a financial analysis.
margalabargala
The parent specified in Europe. It's a fact that in January 2025, European Tesla sales have had significant YoY declines, attributed to Musk's political activity. A greater than 50% drop in sales in France and Germany, for example.
Here are a couple sources.
https://www.ft.com/content/ea2329e4-b4bc-4e2d-be34-e9a8ea311...
https://www.nytimes.com/2025/02/05/business/tesla-germany-el...
mongol
"Tesla’s sales plummet across Europe"
Financial Times January 2025
https://www.ft.com/content/ea2329e4-b4bc-4e2d-be34-e9a8ea311...
rapsey
Reddit is far from real life. Tesla is very popular in europe.
Tagbert
that has changed drastically recently. Big drops in sales in EU.
hanszarkov
Tesla makes great products.
margalabargala
Tesla has great battery and motor tech. Their quality control and car interiors leave a lot to be desired.
heyjamesknight
[flagged]
margalabargala
Tesla gained a reputation of being the best EVs around, by virtue of being essentially the only company making EVs able to truly replace a gas car for close to a decade. It's easy to be the best in a category with just one competitor.
Now that other companies are making EVs that compete directly with Tesla, they aren't reliably best-in-class or best-in-price-point anymore. Compare the Rivian R1T to the Cybertruck, or the Equinox EV to the Model Y, or the Ioniq 6 to the Model 3. The top of the line Model S still doesn't really have any viable competitor.
Tesla has phenomenal battery and motor tech, but their actual car design leaves a lot to be desired, and that's starting to hurt them now that they aren't the only game in town.
And the fact that their CEO throws Nazi salutes at political rallies does not help their market share. In Europe at least that's directly impacting their sales.
solatic
Honda is bigger than just automobiles, they also hold the lion's share of the two-wheeler market (motorcycles, scooters). They're a far way from dead.
llm_nerd
I have huge doubts that Teslas will retain a "halo premium", except in some very strange circles. Already they're an embarrassing car to own and the financials of that company are rapidly flushing down the toilet, making it a question of how long it will be a going concern (hence all the frantic rushing around for legitimacy in other markets...robots, why not?)
They are widely cited as unreliable, poorly built vehicles. My neighbour bought a used model S and the first time he saw us after buying it he came over to justify his purchase ("Got a killer price, etc").
silisili
> Already they're an embarrassing car to own
I don't know if that's true, but I find it all pretty funny regardless.
Five or more years ago, people hated Tesla drivers, either because they represented wealth or that they were seen as progressive 'tree huggers'.
Today people seem to hate Tesla drivers because the brand is for right wing nazis.
I think both takes are misguided, and I don't know how popular those takes are, but I can't help but finding the 180 humorous.
For context, I'm not taking a side and don't have a strong opinion either way. I don't own and wouldn't own one, but for reasons with nothing to do with politics or quality.
llm_nerd
Did people really hate Tesla drivers? Aside from an extremely niche "rolling coal" sort, they were just a car. An innovative car that had downsides, but also had big upsides like insane torque and big screens (which were odd at the time, but pretty normal now). They were neat to tech sorts.
And notably the average loaded pickup truck -- the kind that fill every highway and road -- is more expensive than the average Tesla, so I don't think it has ever represented wealth, and the "people are jealous" thing has always been rather silly. One of the most common situations to see Teslas today are delivery vehicles and Ubers.
The honeymoon has worn off, though, and the blindness to the many design and build flaws of the vehicle, or the extremely anti-consumer behaviour of that company, has earned it a public sentiment that has declined. Now add that it is the primary wealth vehicle for one of the worst people on the planet, such that it started transitioning into pandering to let's call them bad people (the CyberJunk), and it's just a nameplate carrying a lot of negativity now.
>but I can't help but finding the 180 humorous.
The both-sidism thing is so incredibly boring. If everyone else didn't start making pretty good EVs, Tesla kept iterating and making better products with better quality and dealing with their customers better (instead of making ridiculous nonsense like their useless truck or robots or whatever else), and it wasn't associated with bankrolling a garbage huamn being, it would still be a beloved brand. But it isn't 2019 anymore.
jgon
So your prediction is that chinese EVs manage to take over and destroy the Japanese car market, but the American auto market somehow gets a pass and Tesla wins? Why would Tesla be any more able to withstand cars that cost like 1/2 for similar quality, and why wouldn't that same calculus apply to their "halo" products? Are the Chinese fundamentally incapable of building a luxury EV? And if Tesla somehow sees that an EV halo product is their only chance for survival, why wouldn't current halo manufacturers like BMW and Mercedes and Lexus also try for that market, and why are they sure to fail while Tesla succeeds?
And maybe your response to all of the above is that Tesla will not be allowed to fail as part of an industrial strategy on the part of America, in which case the question is why would the other domestic manufacturers like Ford and GM be allowed to fall by the wayside? And further, why would Japan not also embark on a similar strategy and prop up their domestic manufacturers?
Any way you look at it, a prediction that China wins out everywhere except for plucky old Tesla moving into the "Apple" position seems like some sort of bizarre partisanship/home team support that doesn't stand up to a moment of scrutiny.
mrguyorama
This basically means Nissan is dying. It's finances are screwed right now, and this was essentially their last hope. Nissan may not survive the year.
owlninja
This made me think of the Nissan.com guy and am just now learning he passed in 2020.
user3939382
Oh that’s sad :( I was always rooting for him.
wil421
They’ve had multiple quarters where sales dropped by 90%, they’ve been dying for over a decade.
onlypassingthru
I doubt the Japanese government will let Nissan fold and will instead invest directly, allow Foxconn to take over or some combination thereof. Losing the formerly mighty Nissan would be a big black eye for the government.
vardump
Both are likely dying. Small manufacturers have hard time moving to mass market EV age, even EV pioneering Nissan.
encom
As a Leaf owner, that has me worried :/
morkalork
I don't understand what went wrong here, for a while the Nissan Leaf was _the_ economical all electric sedan. Toyota was and still is dragging their feet on it and Nissan had a lead for years just to blow it?
kenhwang
For starters, the Leaf wasn't a sedan, it was a hatchback. In the US market, hatchbacks have always significantly lagged sedans in sales despite being more practical. The regular Prius has evolved to look sleeker and sportier with each generation, but the boxy hatchback Prius V variant was quickly discontinued after introduction due to poor sales.
US consumer preference seems to weigh aesthetic appeal much more than other markets, even at the cost of function. Some other examples are the rugged boxy SUVs that have an aerodynamic/fuel economy penalty compared to their sleek blob counterparts, or the the coupe SUVs that sacrifice both rear headroom and storage capacity for a "sportier" look.
While this is HN so any automotive conversation inevitabely becomes an ideological war between EV vs ICE fanatics, this didn't play as significant a role in the failure of Nissan and Honda's merger.
As stated in the article - "the merger talks unravelled in a little more than a month due to Nissan's pride and insufficient alarm about its predicament"
More critically, Japanese automakers have always tried to diversify away from Japan as part of the "Flying Geese" paradigm.
For example, Toyota and Honda truly became "American", Mitsubishi truly became "Southeast Asian" (Indonesia, Philippines, Thailand, Vietnam), Isuzu became "Thai", and Suzuki became "Indian".
Nissan on the other hand tried a foreign expansion with the Datsun in the 1960s-80s, but that crashed and burned horribly, and reduced their appetite to expand abroad.
Post-Datsun, most of their international expansion tied their future to Brazil, China, and India as part of the Renault-Nissan partnership under Carlos Ghosn, but that itself came very late (early 2000s) and other players (domestic, international, and Japanese) were well established in those markets already.
Furthermore, Nissan Group's prestige division Nissan Shatai is too entwined politically to Kyushu, which scuttled the merger as Honda would have shut down Nissan's Kyushu factories which represent much of Nissan's capex.
Fundamentally, Nissan's leadership has a low appetite of taking risks abroad after the failure of Datsun, and this would have been toxic for an internationally minded Japanese firm like Honda who has stronger PMF abroad compared to domestically in Japan.