Honda and Nissan to Merge?

[djb]

In 2008 Ford levered up everything they owned and took on a massive amount of debt to restructure.

However they only sell 4.4M units a year, not even 1M more than Nissan. They now have $160B in debt. They wasted billions building on EV's no one really wanted. 0.5M of there sales is in China which will likely evaporate. There running out of credit line.

If interest rates stay low and they can keep selling F150's at crazy margins they can plod along. If anything changes there going to need a bail out from somewhere.

This is not an slam of Ford vehicles. When there stock collapsed in August I took a hard look at it and its juicy 6% dividend, and when I pealed back the onion layers I ran away. Note this is my opinion alone - NOT financial advice.

A bit of a quibble with how you present Ford's EV efforts. Ford has $160B in debt. At most you could only attribute a few billion to their EV efforts.

Their EVs, especially the Mach-EV, were initially in very high demand. They just couldn't ramp up production while that demand existed, in part because Ford decided to build the final assembly plant in Mexico to avoid tariffs. They proceeded to thoroughly kill that demand by the HVJB (contactor assembly) debacle. They left customer vehicles broken for many months waiting on parts, while the production line continued to build cars. That's a sure way to leave a sour taste with dealers and customers. That wasn't building the wrong car or having the wrong technology, it was putting quality and customer satisfaction last. You can get away with that for a while, until it sticks to you for decades.

 

[SC Maintenance]

A bit of a quibble with how you present Ford's EV efforts. Ford has $160B in debt. At most you could only attribute a few billion to their EV efforts.

Their EVs, especially the Mach-EV, were initially in very high demand. They just couldn't ramp up production while that demand existed, in part because Ford decided to build the final assembly plant in Mexico to avoid tariffs. They proceeded to thoroughly kill that demand by the HVJB (contactor assembly) debacle. They left customer vehicles broken for many months waiting on parts, while the production line continued to build cars. That's a sure way to leave a sour taste with dealers and customers. That wasn't building the wrong car or having the wrong technology, it was putting quality and customer satisfaction last. You can get away with that for a while, until it sticks to you for decades.

I don't think I inferred Ford spent $160B on only EV's. My exact quote is "now have $160B in debt. They wasted billions building on EV's no one really wanted" I recall a report saying they LOST $3.7B thus far selling EV's - so clearly they spent more than that. Greater than $3.7B is "billions" - no?

As for why - neither the equities market or bond market care why, only that it is, and pricing in both reflects that.

The only reason there pertinent to this thread is there pretty close to the position Nissan is, with the exception that TPTB here will never allow Ford to fold and hence no one is concerned.

 

[dogememe]

Where is here?

I don’t know but under $10K cars are still possible.

At the beginning of this year I traded my 2015 Volt in on a Bolt. The dealer, a Chevy dealer part of a huge dealer group around here, sold it used for $9500. Add in the tax credit and someone got a GREAT deal on a GREAT car if they could tolerate the horrible infotainment system/buggy Bluetooth.

 

[WeyounDS9]

I am curious what will come of it.

Nissan certainly has more interesting vehicles than Honda: Frontier, The new Armada, the Z (though thats a bit of a niche product), their Altima can be had with AWD (even though this car gets bashed here all the time I wish I could buy it here in germany where i am stationed)
While Honda has the best reputation for reliability, in my mind lately beating out Toyota with its huge recent issues. (that by the way Nissan everyone's favorite whipping boy on here does not have and would get roasted for, go figure)

 

[rijndael]

the Z (though thats a bit of a niche product),

The Z may be interesting, but it's a failure. They sell like 5-600 per quarter. That's what ... about 10 for each state in the union?

 

[mark pruett]

How many Ridgelines does Honda sell? They seem more and more and more rare.

I don't know, but it actually seems to me that I'm seeing more and more. That could be because I'm noticing the late-models more than I used to; they aren't nearly as distinctive as the early ones.

 

[jsean]

Nissan Honda cancel planned merger

This got interesting, I wonder what’s next for Nissan now. It’s a shame that the company is finally starting to put out some decent products and yet, continue to be in financial doldrums.

 

[SC Maintenance]

Nissan Honda cancel planned merger

This got interesting, I wonder what’s next for Nissan now. It’s a shame that the company is finally starting to put out some decent products and yet, continue to be in financial doldrums.

Good. Sounds like Honda was trying to go all Gordon Gecko on them.

After last week 2 assembly plants and an Engine plant in the USA just became far more valuable in a tariff ridden world.

The whole reason the JCB orchestrated the merger is Foxconn - the Taiwanese company that makes your iPhone and is flush with cash, offered to invest in Nissan. Japan doesn't like foreigners controlling their brand. So Foxconn is likely back in the mix.

https://www.reuters.com/markets/dea...honda-merger-talks-bloomberg-news-2024-12-20/

 

[Nessism1]

It seems that Honda wanted to make Nissan a subsidiary, and Nissan said no. Dealbreaker.

 

[Pablo]

It seems that Honda wanted to make Nissan a subsidiary, and Nissan said no. Dealbreaker.

Hand out hand up all hoping for no strings attached. Not going to happen.

 

[researcher]

Wow.. imagine that.. I said it was a bad idea back when it was announced!

This would take Honda further down the drain to even lower quality (not that they haven't been doing that great lately) with the bad decisions Nissan has been making affecting Honda. But I got people on this forum telling me that no, Mitsubishi buying up their own stocks wasn't a bad thing. Yes it was! It's the same as dumping shares of your partner, in this case Nissan. It's a vote of NO confidence when Mitsubishi was securing their own stock to protect themselves. This was before the Honda-Nissan merger talks! Even Mitsubishi which is in alliance with Nissan did not want any part of the merger! And come on, Mistubishi even saw how bad it was? Wow.. that's something!

So yes the writing was on the wall in a big neon sign.. BAD IDEA! Good that Honda called it off, maybe they do have people with a decent sense of management in that company after all! I'm not the biggest fan of Honda lately but Nissan is a just a mess from a quality and management standpoint. They've earned the mess they're in.

Here's a link that isn't behind a paywall

https://www.japantimes.co.jp/business/2025/02/05/companies/nissan-honda-merger-off/

 

[rijndael]

This is going to hurt Nissan's near term sales.

Maye they can team up with Stellantis, it seems fitting to put all of the near term failures under one umbrella.

 

[SC Maintenance]

Wow.. imagine that.. I said it was a bad idea back when it was announced!

This would take Honda further down the drain to even lower quality (not that they haven't been doing that great lately) with the bad decisions Nissan has been making affecting Honda. But I got people on this forum telling me that no, Mitsubishi buying up their own stocks wasn't a bad thing. Yes it was! It's the same as dumping shares of your partner, in this case Nissan. It's a vote of NO confidence when Mitsubishi was securing their own stock to protect themselves. This was before the Honda-Nissan merger talks! Even Mitsubishi which is in alliance with Nissan did not want any part of the merger! And come on, Mistubishi even saw how bad it was? Wow.. that's something!

So yes the writing was on the wall in a big neon sign.. BAD IDEA! Good that Honda called it off, maybe they do have people with a decent sense of management in that company after all! I'm not the biggest fan of Honda lately but Nissan is a just a mess from a quality and management standpoint. They've earned the mess they're in.

Here's a link that isn't behind a paywall

https://www.japantimes.co.jp/business/2025/02/05/companies/nissan-honda-merger-off/

Please. Honda still uses a V6 timing belt and can’t build a turbo that doesn’t dilute. Pot calling kettle.

 

[jsean]

Please. Honda still uses a V6 timing belt and can’t build a turbo that doesn’t dilute. Pot calling kettle.

This. People tend to hold Honda on a pedestal that I can’t seem to understand. Older Hondas - sure, I get that. But the new lineup is pretty meh imo.
The new Murano, Armada and the Pathfinder (to a lesser extent) are good value propositions in the market. Nissan got rid of their POS Jatco sourced CVTs and went with the proven ZF9 spd. Took them forever but they fixed the big sore spot imo.
Honda still continues with their approach of the timing belt and oil diluting turbos as you said. I think it’s funny that the same people who badger Nissan for their choice of Jatco CVTs forget the issues Honda had with their in house manufactured 5 and 6 spds.

 

[rijndael]

This hatred of a J35's timing belt is odd. It's really not a big deal.

 

[tbm5690]

This hatred of a J35's timing belt is odd. It's really not a big deal.

Agreed. A chain is less maintenance, yes, but it's nosier and harder on oil so pros and cons. The belt goes 100K and based on feedback from many that's well on the side of caution based on condition at removal. I paid $1100 for a TB/water pump job last year, although could've figured it out on my own if I had to. If a little over a grand every 100K breaks you the Honda isn't the problem, your finances are the problem.

 

[Nessism1]

Good that Honda called it off, maybe they do have people with a decent sense of management in that company after all!

By all accounts I've seen, it's Nissan that called it off, not Honda.

 

[Nessism1]

The last two vehicles I've owned were a Nissan Sentra and Honda Civic. Between the two, the Nissan was more reliable. My Civic's AC system suck a big one, and Honda won't address the problem. Yes, there are warranty extensions on a couple of parts, but Honda won't cover the expensive evaporator, which often fails.

If a little over a grand every 100K breaks you the Honda isn't the problem, your finances are the problem.

This comment is pretty lame.

 

[researcher]

By all accounts I've seen, it's Nissan that called it off, not Honda.

huh, really.. all accounts you say? You really should've read more articles..

Quoting from The Japan Times article I linked to, and I quote..

"Honda, with a market value nearly five times bigger than Nissan, was increasingly worried about its smaller rival's progress on the turnaround plan, said the other person."

"The news saying that Nissan did not want to be a Honda subsidiary appears to highlight that control was a contentious issue," said Christopher Richter, senior Japan autos analyst at brokerage CLSA.

"Without being able to have control, Honda appears to be walking away."

Yup really looks like Nissan called it off?? lol.. No.. actually Honda didn't care but let Nissan "save face" typical of Japanese culture.

And Honda should have had control over a company (Nissan) who mismanaged their corporation into the situation of having to ask for a merger to survive! Ya and people want to go off on Honda? Funny indeed!

 

[Nessism1]

huh, really.. all accounts you say? You really should've read more articles..

Quoting from The Japan Times article I linked to, and I quote..

"Honda, with a market value nearly five times bigger than Nissan, was increasingly worried about its smaller rival's progress on the turnaround plan, said the other person."

"The news saying that Nissan did not want to be a Honda subsidiary appears to highlight that control was a contentious issue," said Christopher Richter, senior Japan autos analyst at brokerage CLSA.

"Without being able to have control, Honda appears to be walking away."

Yup really looks like Nissan called it off?? lol.. No.. actually Honda didn't care but let Nissan "save face" typical of Japanese culture.

And Honda should have had control over a company (Nissan) who mismanaged their corporation into the situation of having to ask for a merger to survive! Ya and people want to go off on Honda? Funny indeed!

WSJ
Nissan to Reject Honda deal to Create World's No. 3 Automaker

Reuters
Nissan set to step back from merger with Honda, sources say

Finacial Times
Nissan's board rejects $58bn merger with Honda

And BTW, there is no reason to be abrasive. This is a forum, largely, about motor oil. Be nice.