Is Nissan heading for bankruptcy; will Honda buy the iconic Japanese auto maker? Here's what reports are saying (2025)

Synopsis

Nissan, one of Japan's most iconic automobile makers, is financially struggling so badly that it's measured by months now, not years.

Is Nissan heading for bankruptcy; will Honda buy the iconic Japanese auto maker? Here's what reports are saying (1)

Nissan is facing a critical financial crisis as sales are significantly dropping, especially in the North American market. Cars are sold at a loss; production has been cut to 20%, and Nissan has announced that it will let go of 9,000 jobs. It has also sold a third of its stake in Mitsubishi to save itself.

In November, Nissan said its operating profit plunged by as much as 85% in the third quarter and suffered a net loss of 9.3 billion yen ($60.1 million). Consolidated operating profit declined by more than 90% for the six months that ended in September compared to the same period last year. According to The Financial Times, a senior official at Nissan warned, "We have 12 to 14 months to survive."

Cost-Cutting and Restructuring Efforts

Nissan is undertaking a massive restructuring plan to save $3 billion. The company announced that it would cut production of 100,000 cars at its Canton, Mississippi, and Smyrna, Tennessee, plants, which have 13,000 employees.

Despite all these measures, the company still faces various challenges. According to sources, major shareholder Renault is looking to sell its holdings in Nissan, leaving the automaker in search of a new long-term investor. The uncertainty has, coupled with stiff competition from Chinese automakers, made Nissan's survival increasingly precarious.

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A Potential Honda Merger?

In a surprising twist, Nissan has not ruled out a possible merger with Honda. The two companies recently collaborated with Mitsubishi on a long-term EV development partnership. Industry experts claim that the merger of the two companies would benefit Honda and Nissan by pooling together their resources to build better cars as well as address market-related issues.

FAQs:

How has the crisis affected Nissan employees?
Job cuts and production reductions have directly impacted thousands of employees, particularly in factories in the U.S.

Can a merger save Nissan?
A merger, especially with Honda, could help Nissan stabilize by pooling resources and expertise, but it remains speculative at this stage.

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