Honda Motor is willing to revisit merger discussions with Nissan Motor, but only if Nissan’s CEO, Makoto Uchida, steps down, according to a report by the Financial Times citing sources familiar with the matter. The two Japanese automakers, ranked second and third in sales after Toyota, had been exploring the possibility of creating a $60 billion firm. The need for such a collaboration stemmed from Nissan’s struggles in the U.S. due to a lack of hybrid models and increasing competition from Chinese manufacturers, which have been disrupting the global automotive industry.

Failed Negotiations and Growing Uncertainty

The merger discussions collapsed last week, leaving Nissan in deeper turmoil and underscoring the mounting pressure on traditional car manufacturers. Despite the failure of talks, Honda is reportedly open to reviving negotiations—but only if a new Nissan CEO can better manage internal opposition to the deal.

Nissan CEO Under Pressure

Uchida has been facing increasing scrutiny over Nissan’s prolonged struggles, including years of declining sales and internal management challenges. Reuters previously reported that the next few months would be critical for both his leadership and Nissan’s future. The recent collapse of merger talks has only intensified calls for his resignation, with mounting pressure from board members and Nissan’s French partner, Renault.

Read More: Nissan and Honda End Merger Talks, Opt for Strategic Partnership

Why the Talks Fell Apart

According to sources, the merger discussions unravelled quickly due to a combination of Nissan’s reluctance to acknowledge its challenges, internal resistance, and Honda’s proposal to make Nissan a subsidiary. Pride and strategic differences ultimately derailed the potential partnership in just over a month. Honda CEO Toshihiro Mibe recently stated that the company has no intention of launching a hostile takeover of Nissan. However, Honda remains open to collaboration, provided Nissan undergoes leadership changes that facilitate smoother negotiations.

Nissan’s Turnaround Plan

Amid the ongoing uncertainty, Nissan has been working on a restructuring plan that includes reducing its global workforce by 9,000 employees and cutting manufacturing capacity by 20 per cent. The company announced it would provide an update on its turnaround efforts within a month. While Uchida has expressed his intent to remain in his role until 2026, pressure from within the company and Renault could force him out much sooner, especially after the failed merger discussions with Honda.