Honda, Nissan merger talks collapse over control issue
Honda Motor Co. and Nissan Motor Co. said Thursday that they have scrapped a historic realignment plan to become one of the world's biggest auto groups as they could not agree on how to bring their operations together, Kyodo reports.
But Honda and Nissan, Japan's second- and third-largest automakers, will continue their talks to form a strategic partnership in electric vehicles and other fields along with Mitsubishi Motors Corp., Nissan's alliance partner, they said.
The collapse of the negotiations, less than two months after they started, will compel the automakers to reassess their survival strategies and may influence the auto industry's realignment.
Honda and Nissan said in December that they aimed to finalize negotiations by June 2025 and establish a holding company in 2026 under which both would operate. Mitsubishi had also considered joining the framework.
After considering "various options," including Honda's proposal to make Nissan its subsidiary, they decided to end the talks to "prioritize speed of decision-making and execution of management measures" in an increasingly volatile market heading into electrification, they said in a statement.
Speaking in an online press conference, Honda CEO Toshihiro Mibe said his company had proposed to take control of Nissan, believing that the initially envisioned holding company's board composed of representatives from both sides could delay its decision-making process.
"We expected that (accepting) our proposal would be an extremely tough judgement for Nissan," Mibe said.
Nissan CEO Makoto Uchida said in a separate press conference that his company rejected the idea because "we couldn't be confident if our autonomy would be ensured."
The two carmakers aimed to cut costs by sharing the growing financial burden of developing EVs and software to better compete with global rivals like U.S.-based Tesla Inc. and China's BYD Co.
When they revealed their plan to begin merger talks at a press conference in December, Honda said struggling Nissan would need to boost its turnaround efforts as a condition for the deal.
In November, Nissan said it would cut 9,000 jobs worldwide and reduce its global production capacity by 20 percent.
But Nissan's plans failed to convince Honda that the slumping carmaker is on track for a successful turnaround, sources familiar with the matter have said.
Fearing that slow progress in Nissan's revamp could jeopardize the merger's future, Honda sought to become its parent, but the move riled Nissan's board and pushed it toward scrapping the plan, according to sources.
Honda and Nissan initially said they would unveil the details of their tie-up plan by the end of January but pushed it back to mid-February.
Analysts expect Taiwanese electronics giant Foxconn, formally Hon Hai Precision Industry Co., to intensify efforts to acquire a stake in Nissan, given its recent entry into the EV market and past talks with Renault SA about purchasing some of the French automaker's shares in Nissan.
On Wednesday, Hon Hai Chairman Young Liu told reporters in Taiwan that the company's aim is "cooperation" with Nissan, not acquisition.
In late December 2024, Honda Motor Co. and Nissan Motor Co. signed a memorandum of understanding to initiate discussions on a merger that would establish a new holding company.
