Nissan Offended And Refuses To Be Honda's Subordinate, Merger Of 60 Billion US Dollars Runs Aground

JAKARTA - The merger talk between Nissan and Honda, which was announced last December, had rocked the automotive world, how could it not be realized that the Japanese giants' merger would make it the fourth largest car manufacturer in the world. This means that this merger was originally going to create the fourth largest automotive group in the world based on vehicle sales, after Toyota, Volkswagen, and Hyundai.

Now, the planned merger between Nissan and Honda, two Japanese auto giants, which are said to be worth US$60 billion (equivalent to Rp981 trillion), reported by Reuters on February 14, is almost certainly officially over without an agreement.

This news immediately caused deeper uncertainty for Nissan, especially amid the increasingly intense pressure from Chinese automakers.

A trusted source said that Honda's proposal to make Nissan a subsidiary and not stand parallel became the main stumbling block.

However, the two companies affirmed their commitment to continuing the previously established cooperation, including with Mitsubishi Motors, in the development of technology and other fields.

Analysts assess this kind of collaboration is crucial for established car manufacturers, especially in the face of onslaught by Chinese electric car manufacturers such as BYD which continues to annex market share with more sophisticated and software-rich cars.

Not only that, Japanese automakers are also facing a tariff threat in the United States for vehicles imported from Mexico, an important manufacturing hub for them.

Nissan, who is considered one of the most problematic established car manufacturers, has not fully recovered from the crisis and management turmoil sparked by the arrest and dismissal of former chairman Carlos Ghosn in 2018.

"Honda is confident enough and has many advantages, while Nissan is in an unfavorable position. They don't have partners at this time," said Christopher Richter, Japan's automotive analyst at broker CLSA.

"They may need to think about doing something different," he added.

Previously, Honda CEO Toshihiro Mibe stated at a press conference that although joining Nissan would cause "temporary pain," he ended up more worried about the impact if the talks protracted without progress.

He also emphasized that Honda did not plan to make an offer of forced takeover against Nissan. The failure of this discussion, according to him, was "disappointing."

Meanwhile, French automaker Renault, Nissan's main shareholder, stated that the proposed merger terms, including the absence of premiums, were unacceptable.

The failure of this merger is clearly a blow to Nissan and raises big questions about their strategy going forward in the midst of a rapidly changing auto industry landscape.