Scrapping $60 billion merger talks, Nissan and Honda, despite setbacks, continue collaborating on tech while seeking new partnerships to survive.
Nissan and Honda have called off their merger discussions, which had aimed to create a $60 billion car manufacturing giant, reportedly leaving Nissan facing even greater uncertainty.
The talks, first revealed in December, were marred by a series of disagreements, particularly regarding the power distribution within the proposed union. Honda’s insistence that Nissan become a subsidiary was a key factor in the collapse of negotiations.
Both automakers had hoped to join forces to strengthen their position against the rapidly expanding Chinese electric vehicle (EV) manufacturers. However, despite the setback, they plan to continue collaborating in other areas, including technology.
According to the Economic Times, Nissan, in particular, has been struggling, still reeling from the crisis and leadership upheaval following the 2018 arrest of former chairman Carlos Ghosn. Industry analysts have noted that Honda is in a stronger position, while Nissan finds itself without a clear partner when it faces increasing challenges.
The merger would have made the combined entity the fourth-largest carmaker globally by sales, after Toyota, Volkswagen, and Hyundai. Honda’s CEO, Toshihiro Mibe, described the collapse of the talks as disappointing but stated that prolonged negotiations without progress would have been worse for both companies.
Honda is now exploring potential partnerships with other automakers, including Mitsubishi, which had also participated in the talks but withdrew.
Japanese manufacturers, already struggling with the rise of Chinese EV firms like BYD, are also contending with the threat of tariffs in the U.S. Nissan is pursuing a restructuring plan that includes job cuts and global capacity reductions to cope. Meanwhile, the company is looking for new partnerships, with Taiwanese firm Foxconn among the potential candidates.
Following the announcement of the merger talks in December, both Nissan and Honda saw significant increases in their stock prices, although those gains have since diminished. Currently, Nissan’s market capitalisation is considerably smaller than Honda’s, reflecting the latter’s stronger position in the global market.
