Tariff Troubles Drive Nissan, Honda To U.S. Manufacturing Talks: Report

Nissan Motor NSANY has reportedly opened negotiations with Honda Motor Co. HMC to produce vehicles for its rival at a U.S. factory. Both companies seek ways to blunt the impact of upcoming U.S. tariffs on Japanese-made autos.

According to Nikkei Asia, the companies are exploring a supply arrangement that could see Nissan manufacture large pickup trucks for Honda at its Canton, Mississippi, plant.

The vehicles would bear Honda nameplates and be sold under the Honda brand in the U.S. market. This would allow Honda to expand its presence in the full-size pickup segment, which currently makes up about 20% of new car sales in the U.S.

Also Read: Ray Dalio Says Trump’s Tariffs Are ‘Theoretical,’ Warns They May Not Bring Manufacturing Back To US

Nissan’s Canton plant is currently underused, operating at just 57% capacity in 2024. Producing vehicles for Honda could help increase utilization and improve Nissan’s financial position. The move would accelerate Honda’s local production without requiring significant investment in development.

Nikkie Asia mentioned that the plan comes as U.S. tariffs set to take effect August 1 are expected to reduce Honda’s operating profit by $4.42 billion and Nissan’s by $3.06 billion.

Nikkei Asia reports that the companies are ruling out a merger for now but are holding regular meetings to pursue mutually beneficial cooperation.

Separately, Nissan raised approximately 860 billion Japanese yen (~$5.86 billion) through oversubscribed U.S., euro, and yen bond offerings. The proceeds will support debt refinancing, general operations, and future investments in electrification and software-defined vehicles as part of its Re:Nissan recovery plan.

Price Action: HMC shares are trading lower by 0.33% to $30.65 premarket at last check Friday.

Read Next:

• Tesla Sales Slump Prompts Panasonic To Delay $4 Billion US Battery Plant Expansion: Report

Photo by JRomero04 via Shutterstock