The recent discussions between Honda and Nissan have left many scratching their heads. On the surface, this partnership seems unbalanced. Honda, known for its financial stability and strong reputation for reliability, doesn’t appear to gain much from taking on Nissan, a company that has been battling serious challenges. Yet, there is more beneath the surface than meets the eye.
Honda has now shared insights into why this merger makes sense. It’s not just about keeping Nissan afloat. Instead, Honda is strategically leveraging Nissan’s expertise in areas where Honda historically struggles, like large vehicles and production scaling.
Noriya Kaihara, Honda’s Executive Vice President, has outlined potential areas where Nissan can complement Honda’s growth plans. In the U.S., where full-size SUVs and trucks dominate, Honda has long been at a disadvantage. Nissan, with its Titan, Armada, and Infiniti QX80, already has the product lines that Honda needs.
In a recent press event, Kaihara stated, “In the short term, especially in the U.S., Nissan has large vehicles that we don’t have. If we can exchange or co-develop vehicles, it benefits us. We may even integrate some Nissan offerings into the Honda lineup sooner than expected.” This approach allows Honda to tap into a new customer base at minimal expense, cutting down on development timelines.
Cost-Sharing: A Smart Move for Future Developments
Beyond adopting large vehicle platforms, Honda also plans to share development costs with Nissan. Their collaboration is expected to make Honda’s upcoming innovations more financially sustainable. A prime example is Honda’s new operating system, the Asimo OS, which will debut in 2026 alongside its 0 Series EVs. Kaihara emphasized that merging development budgets could dramatically reduce expenses for both automakers.
With the demand for electric vehicles soaring globally, both companies will benefit from pooling resources to fast-track technology and compliance advancements. The collaboration could even pave the way for jointly developed EV platforms in the near future.
Tariffs Reshaping the Automotive Landscape
Amid the Honda-Nissan news, another pressing issue looms over the auto industry: the impact of tariffs. Recent geopolitical challenges, including newly proposed tariffs on imports, have left manufacturers reevaluating supply chain strategies. Companies now face tough decisions about where to source and assemble vehicles.
Paul Thomas from Bosch explained this dilemma succinctly, stating, “When tariffs rise anywhere between 10% and 60%, businesses must calculate whether reshoring or relocating production leads to financial advantages.” While some automakers look to the U.S. for manufacturing, Honda has hinted at plans to shift production back to Japan. Vehicles that are currently Mexico-built may soon arrive in the U.S. from Honda’s domestic factories.
The cost of compliance with shifting trade policies is reshaping every link in the supply chain, from raw materials to finished automotives. For multinational manufacturers, the stakes are higher than ever.
China’s EV Boom Faces Unpredictable Headwinds
China has made massive strides as an automobile powerhouse, with its exports hitting record highs in recent years. Yet, its dominance in the EV market faces challenges as global tariffs on Chinese goods take effect.
In 2024, China exported 4.8 million vehicles globally, a 25% year-over-year increase. Of these, 24% were electrified models. However, growth is expected to flatline in 2025, marking the first significant slowdown in its meteoric rise. Tariffs from critical markets like the U.S. and Europe have been a key factor in curtailing this expansion.
Despite these challenges abroad, Chinese automakers like BYD and Geely are thriving domestically. In 2024, 47% of cars sold in China were new-energy vehicles, with that figure predicted to hit 57% in 2025. Meanwhile, foreign automakers like GM and Volkswagen are gradually losing ground, pushed out by stronger domestic competitors.
Honda and Nissan’s Strategy: Stealing the Spotlight
The merger between Honda and Nissan represents more than just financial recovery for one brand and risk for another. It’s a calculated alliance, leveraging each brand’s strengths to tackle weaknesses neither could resolve alone. Honda gains access to Nissan’s extensive full-size truck and SUV expertise, while Nissan benefits from shared costs that could revitalize its development pipeline.
This strategy comes at a critical time in the industry. Between rising tariffs, evolving trade policies, and competition from new market entrants, automakers must innovate not just in their vehicles but also in their global operations.
With the partnership focusing on synergy, cost-sharing, and a renewed presence in lucrative segments like large vehicles, Honda and Nissan are clearly aiming to hedge against challenges and make a mark in both traditional and electric automotive markets.
