In the summer of 2020 when the Financial Times reported that Japanese government officials had tried to merge Honda and Nissan, sceptics scoffed at the idea as akin to mixing “oil and water”. Nearly four years later, Japan’s second- and third-largest carmakers (behind Toyota) are planning to combine forces to develop electric cars in a bid to survive the coming wave of high-tech, low-cost models from China. While Honda has ruled out a capital tie-up with Nissan for now, the endeavour is the closest the two historic rivals have ever come in terms of working together.From the early days of their establishment, Nissan and Honda have taken very different paths to growth. When Nissan started in 1934, Yoshisuke Aikawa, its low-profile founder, built the group into a massive conglomerate during the prewar period through a series of aggressive acquisitions that were funded by taking its companies public. In the case of Soichiro Honda, the charismatic founder of the eponymous carmaker, he was famous for his go-it-alone strategy and is said to have criticised alliances for slowing things down. Until recently, that DNA has stayed with the company. 

Today, the two corporate cultures remain just as different as in the past, but that does not necessarily mean that the planned partnership is doomed to fail. The reasons that have brought the bitter rivals together are similar, although the degree of desperation may vary. Both Nissan and Honda have stumbled in their traditional approaches to expansion, misreading the pace of market changes in China, and they lack the scale and resources to remain competitive global players. 

After a quarter of a century, Nissan and its French alliance partner Renault have sharply cut back their capital ties as both companies acknowledged that the partnership would not be enough to survive the industry disruption caused by the shift to electric vehicles and tougher emission rules. Nissan chief executive Makoto Uchida is blunt on the need for new partners, although the company insists its alliance with Renault and Mitsubishi Motors will not be unwound.