It hasn't been a month since two Japanese automakers, Honda and Nissan, officially announced their merger plans, but it appears that it's already facing a major hurdle. According to reports coming from Japan,

The problem is there is no likely outcome that would leave both companies and their employees better off than they are today.

Honda executives recently shared insights into their rationale for the proposed merger with Nissan.During a media roundtable at CES 2025 in Las Vegas Honda stressed the urgency to address mounting competition from Chinese automakers,

To hit this target, Nissan will need to rake in approximately 400 billion yen in fiscal 2026—roughly $2.6 billion at current exchange rates. That’s a tall order, especially considering Nissan’s operating profits plummeted by 90.

Honda and Nissan have signed a memorandum of understanding (MoU) to start discussions that could pave the way for a merger of the two companies.

The proposed merger between Honda and Nissan, aimed at creating one of the largest automotive conglomerates in the world, has encountered

The direct-to-consumer sales model may witness some dealer resistance since Honda relies on a vast dealer network. Scout is facing a similar backlash from Volkswagen dealers. And the Afeela 1 will also be manufactured at Honda’s Ohio production hub, where most popular models, like the Accord and CR-V are made.

Honda is eager to ensure there's no foreign influence on its merger with Nissan, especially since Taiwan's Foxconn has been eyeing the ailing brand

Honda reportedly wants Nissan to buy out the share Renault has in it, before the two Japanese brands shack up together in 2026.