Nissan and Honda Call Off $60bn Merger Talks but Pledge EV Collaboration
Japanese automakers Nissan and Honda have announced the end of discussions regarding a potential merger that would have created a $60 billion (£48bn) automotive giant. However, both companies affirmed their commitment to continued collaboration in the electric vehicle (EV) sector.
Had the merger gone through, the combined entity would have become the world’s fourth-largest carmaker by sales, following Toyota, Volkswagen, and Hyundai.
Sources indicate that negotiations fell apart due to increasing disagreements, with one key issue being Honda’s proposal for Nissan to become a subsidiary—an arrangement Nissan ultimately rejected. According to a previous Reuters report, these differences led Nissan, Japan’s third-largest car manufacturer, to withdraw from the talks.
The discussions initially included Mitsubishi Motors, a junior partner in the alliance, though reports suggested Mitsubishi was unlikely to participate.
Continued Collaboration in EV Technology
Despite the collapse of the merger, the three automakers have reaffirmed their commitment to working together in the evolving landscape of intelligent and electrified vehicles.
"The three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles," they stated.
The decision comes at a time when the global automotive industry is undergoing rapid transformation, particularly due to the rise of Chinese EV manufacturers such as BYD. Nissan and Honda, like many competitors, also face the challenge of potential tariffs in the U.S., a crucial market for their business.
Nissan’s Restructuring and Future Partnerships
Nissan is currently undergoing a major restructuring, announced in November, which involves cutting 9,000 jobs and reducing global production capacity by 20%. The company has yet to disclose which locations will be affected, but reports suggest that its UK plant in Sunderland is unlikely to be impacted.
Prior to the merger talks, Nissan and Honda had been in discussions regarding a technology-sharing partnership, with further details expected to be outlined later on Thursday.
Meanwhile, Nissan is now exploring potential collaborations with new partners. One possibility is a tie-up with Taiwanese electronics giant Foxconn. Last week, Reuters reported that Foxconn might take a stake in Nissan, with chairman Young Liu confirming that while cooperation was the primary goal, an investment was also being considered. Foxconn is well known for manufacturing Apple’s iPhones in China.
Nissan’s Struggles in the EV Shift
The shift towards electric vehicles has proven particularly challenging for Nissan, which has struggled to recover from a turbulent period following the 2018 arrest and removal of former chairman Carlos Ghosn.
Currently, Nissan’s market capitalization is nearly five times smaller than Honda’s, which stands at approximately 7.5 trillion yen (£39bn). A decade ago, both companies were valued at around 4.6 trillion yen.
While the merger may be off the table, Nissan and Honda’s commitment to collaboration in EV technology signals that they are still looking for ways to stay competitive in an industry undergoing rapid change.
Leave A Comment