Honda refuses to accept the outcome and is even ready to team up with Nissan to keep fighting.
At Honda's annual general meeting of shareholders last Friday, the current President, Toshihiro Mibe, continued to receive support and was re - elected as a director. The atmosphere of this meeting was as tense as that of Nissan's previous annual general meeting. Just last month, Honda reported its first annual loss in seventy years. Therefore, Toshihiro Mibe apologized to the shareholders at the beginning of the meeting.
The direct cause of the loss was the restructuring cost of over $9 billion in the electric vehicle business. Moreover, the strong pursuit of Chinese competitors has put increasing pressure on Honda in key markets. What caught the management off - guard was that the full implementation of the US tariff policy and the simultaneous cancellation of subsidies for electric vehicles have made Honda's originally planned electrification route in North America suddenly become bumpy.
Toshihiro Mibe admitted at the meeting that after the disappearance of subsidies, the actual market share of pure - electric vehicles in the US market was far lower than the company's earlier prediction. If they were to push forward according to the original plan, such a sales model would mean that the entire electric vehicle business would not be able to get out of the red for at least five, or even seven years, which was an extremely critical situation for the company.
He acknowledged that the shareholders' calls for holding the management accountable were reasonable. However, he emphasized that his real responsibility as the president was not to step down due to the mistakes but to quickly get the company back on the growth track, come up with "mobility solutions that only Honda can offer", and act with a sense of urgency.
Another focus of the shareholders' attention was the obvious change in Honda's strategic direction. A few years ago, Toshihiro Mibe publicly proposed "priority for electric vehicles", but now the company has quietly abandoned this route and instead regarded hybrid vehicles as the top priority. Some shareholders believed that this confirmed their earlier concerns, while others thought it was a pragmatic adjustment in the face of reality.
In fact, Honda has cancelled the R & D plans for two next - generation 0 - series pure - electric models, including the model originally planned to be launched by the Afeela brand, a joint venture with Sony. The project to build an electric vehicle and supporting supply chain in Canada has also been frozen. Last month, Toshihiro Mibe even gave up the goal of completely stopping the sale of fuel - powered vehicles by 2040.
Currently, Toshihiro Mibe's strategic focus has clearly shifted to hybrid vehicles, and at the same time, the scale of pure - electric vehicles has been significantly reduced. His new goal is that the new - generation hybrid models will be the main force for recovery before 2030. The first model will be unveiled next year, and a total of 15 new hybrid models are planned to be launched globally, targeting the North American market. By 2030, the global sales target for hybrid vehicles will be increased from the original 2.2 million to 2.5 million.
Should Honda, Nissan, and Mitsubishi Form an Alliance?
While admitting mistakes and adjusting strategies, Honda is also actively presenting another way out to the shareholders and is vigorously promoting the upcoming cooperation with Nissan. Toshihiro Mibe said that this cooperation "is progressing quite smoothly, and in some aspects, it is close to being announced", and the two sides are advancing various projects in a mutually beneficial relationship.
Actually, Honda, Nissan, and Mitsubishi Motors have entered the final negotiation stage regarding the standardization of the next - generation automotive electronic control unit (ECU). The ECU is the foundation for software operation and the core component for controlling functions such as autonomous driving and in - vehicle information systems. By jointly purchasing this key component, these three Japanese companies hope to develop more cost - competitive vehicles.
Data shows that the total global sales of Honda, Nissan, and Mitsubishi will reach 7.3 million vehicles in the fiscal year 2025. The expansion of the procurement scale brought about by the standardization of parts will directly reduce the cost per vehicle, thus helping them better compete against Chinese automakers and Tesla in the United States. After all, these two parties are clearly leading in the field of intelligent vehicles.
It is reported that the three companies are considering applying this general ECU to both pure - electric and hybrid models. They will then finalize the specific development and procurement framework, and Mitsubishi Motors will also contribute funds. In addition, Honda and Nissan are also discussing the standardization of in - vehicle operating systems because, in addition to hardware, unified software and operating systems are also crucial for the development efficiency of intelligent driving vehicles.
In North America, the two sides are also accelerating the finalization of a joint production agreement. Nissan is considering supplying pick - up trucks to Honda and Mitsubishi and is also exploring the joint development of large - scale vehicles. Although details such as the sharing of R & D funds have not been fully negotiated, all parties strive to reach a final agreement within a few weeks, and vehicles equipped with the general ECU could be launched as early as 2029 - 2030.
Toshihiro Mibe believes that as long as the first project is successfully completed, cooperation in other fields will be much smoother.
However, this cooperation is not without variables. Honda and Nissan announced in August 2024 that they would explore cooperation in five fields, including software - defined vehicles. They started discussing a merger in December of the same year, but the negotiation broke down in February 2025 and later turned into project - level cooperation.
Renault, a French automaker that holds 15% of the voting rights in Nissan, has now become the biggest potential obstacle. At Nissan's annual general meeting last week, Renault subtly influenced the shareholders' voting and rejected Nissan's proposal to appoint Motoo Nagai, from Mizuho Financial Group, as an external director. Mizuho has a close relationship with Nissan.
A Nissan insider said bluntly: "This shows that if Renault opposes what we want to do, it may not be achievable." Since the shareholders' approval is crucial for Nissan to make important decisions such as director appointments, business transfers, and even capital alliances, if Renault opposes further deepening of cooperation, the negotiation between Honda and Nissan may fall into a deadlock at any time.
At Honda's annual general meeting, there were also voices questioning the management's decision - making delay. A 70 - year - old participant complained: "They need to cooperate with Nissan as soon as possible, but the negotiation is progressing too slowly." In fact, Honda's current situation is more difficult than when the negotiation started two years ago.
However, according to Honda's forecast, the company is expected to turn a profit in the fiscal year 2026, with a net profit of 260 billion yen and an operating profit of 500 billion yen. However, the achievement of this goal largely depends on the strong performance of the two - wheeler business to make up for the weakness of the automobile business. For example, the sales volume of the automobile department in the Chinese market has been continuously low, with an operating profit margin of only 2.2%.
Toshihiro Mibe showed his determination at the end of the meeting: "We will master the means to defeat emerging forces, such as new competitors like Chinese automakers, within three years. If we fail to do so, the four - wheeler business will be in trouble. We will face this challenge with unwavering determination." For the shareholders, whether this commitment can be fulfilled still needs time to tell.
Signs of Localization in China
Actually, Honda's problems are far more than just the mistake in its electric vehicle strategy. Like most established automakers, it is facing an unprecedented impact in the Chinese market. In just a few years, its sales volume has dropped sharply from the peak of 1.62 million vehicles in 2020 to 640,000 vehicles in 2025. According to the current trend, the annual production in 2026 may even fall below 600,000 vehicles.
In April this year, Toshihiro Mibe made a trip to China. According to Japanese media reports, his purpose was straightforward: to see with his own eyes how Chinese companies could produce so many cars in such a short time. After visiting a factory of an automotive parts supplier in Shanghai, he said: "We simply can't compete with them."
All international automakers have heard of the "Chinese speed", but few have actually witnessed it. Chinese local automakers can launch a new model in two years or even less, while traditional brands usually take twice as long or more. As a result, it seems to the outside world that new products are being launched in the Chinese market almost every day.
Chinese suppliers can not only keep up with this pace but also complete deliveries with the cost - effectiveness that industry giants dream of. This systematic efficiency does not rely on a single technological breakthrough but on the collaboration mode and decision - making mechanism of the entire industrial chain, which is completely different from the process that Japanese automakers are used to.
However, Toshihiro Mibe's words do not mean admitting defeat. After returning to Japan, he immediately told the suppliers: "We must act quickly." For this reason, Honda is accelerating the R & D process, relocating thousands of engineers to a newly established engineering subsidiary, and restoring the independent R & D department that was weakened in the past.
In the past six years, R & D work has been centralized, with decisions made by the headquarters. The decision - making chain was long, and the response was slow. Under the new structure, engineers will have greater autonomy. Although it is not certain how much energy this degree of freedom can release, it at least shows that the management has realized that the original R & D pace can no longer keep up with the competition.
Subsequently, in May this year, Honda released its latest global strategic plan. Regarding the Chinese market, it stated that it will adopt locally standardized parts, actively utilize local resources in new technology fields, and launch new energy products based on local partner platforms to improve product strength and cost competitiveness with the absolute advantage of Chinese speed.
In short, it is complete localization. At the Beijing Auto Show in April, the two joint - venture companies, Dongfeng Honda and GAC Honda, expressed attitudes that were completely different from their previous conservative styles during interviews.
Cao Dongjie, the executive deputy general manager of Dongfeng Honda, said that in terms of new energy models, Dongfeng Honda will increase the joint development and introduction of the Dongfeng platform and high - end platforms. In the future, we will deeply integrate the advantages of fuel - powered vehicles in power, chassis, quality control, and handling with local intelligence to ensure that fuel - powered vehicles can keep up with the rhythm of the Chinese market. In addition, it will reach strategic cooperation with leading domestic technology companies in new energy products to achieve co - creation.
Lin Zhibin, the deputy general manager of GAC Honda, revealed that the two shareholders are discussing shifting from one - way technology introduction to two - way empowerment and in - depth collaborative R & D. The Chinese and Japanese sides have also upgraded to an equal partnership of technology co - creation and ecosystem construction. The Chinese and Japanese sides have reached a consensus to formulate product strategies based on the Chinese market, transform from a global strategy to a strategy that combines global and local Chinese elements, continuously integrate local resources for product definition, and build self - developed models based on the Chinese new energy platform in 2027.
Actually, the cooperation has already started to be implemented. The CR - V of Dongfeng Honda and the Breeze of GAC Honda are already equipped with cloud - enabled in - vehicle applications powered by Huawei Cloud, which replaces the dependence on in - vehicle computing power with cloud computing power and greatly improves the entertainment ecosystem and voice interaction experience.
When domestic brands build a differentiated barrier with intelligent experiences, Honda's solution in China is to combine its century - long accumulated advantages in chassis, power, and quality control with China's most advanced intelligent capabilities. Whether this path can succeed still needs time to test, but at least the direction is clear.
This article is from the WeChat official account "Automobile Commune" (ID: iAUTO2010), written by Yang Jing and published by 36Kr with authorization.