Japan’s Honda and Nissan scrap merger talks

Japanese auto giants Honda and Nissan confirmed on Thursday that they had scrapped merger talks that will have created the world’s third-largest automaker by unit gross sales.

The bid to affix forces had been seen as an effort to meet up with US titan Tesla and Chinese language companies within the electrical automobile market, in addition to offering a lifeline to struggling Nissan.

The companies stated in a joint assertion that they “agreed to terminate the MOU (memorandum of understanding) signed on December 23 final 12 months for consideration of a enterprise integration between the 2 corporations”.

“That the each corporations weren’t capable of attain an settlement could be very regrettable,” Honda’s CEO and president Toshihiro Mibe informed reporters.

Mibe insisted in December that any merger wouldn’t be a bailout for Nissan, which introduced final 12 months 1000’s of job cuts after reporting a 93 % plunge in first-half internet revenue.

Additional illustrating its issues, Nissan stated on Thursday that it was now anticipating an annual lack of $518 million owing to slumping gross sales.

Japanese media studies have stated the discussions unraveled after Honda proposed making its struggling rival a subsidiary as an alternative of the plan, introduced in December, to combine beneath a brand new holding firm.

The automakers confirmed within the joint assertion that Honda “proposed altering the construction from establishing a joint holding firm… to a construction the place Honda could be the mum or dad firm and Nissan the subsidiary via a share trade”.

Below a joint board, “the decision-making pace might sluggish when a troublesome choice is required,” Mibe stated.

Nissan’s CEO Makoto Uchida stated “given the efficiency of the corporate, there’s a problem to face alone” and Honda’s proposal was “fastidiously mentioned”.

However, he stated, “We couldn’t settle for this proposal as we weren’t certain how a lot our autonomy could be saved and if Nissan’s potential could be maximized” beneath the proposal.

Partnership

The automakers, nonetheless, will proceed to hunt “synergy results” via a strategic partnership introduced in August final 12 months that additionally consists of Nissan’s junior accomplice Mitsubishi Motors, Mibe stated.

Inside the partnership settlement, the businesses will collaborate to thrive in “the period of intelligence and electrified automobiles, striving to create new worth and maximize the company worth of each corporations”, the joint assertion stated.

The cancellation of the merger talks would don’t have any affect on the earnings of each automakers, it stated.

Following the announcement, French automaker Renault, which holds about 35 % of shares in Nissan, stated it welcomed “Nissan’s intention to focus first and foremost on the execution of its turnaround plan”.

It stated it could “proceed to help Nissan in its ongoing tasks.”

The top of Taiwanese tech large Foxconn stated this week it was open to purchasing Renault’s stake in Nissan after studies final 12 months stated it had made an method for the corporate.

Analysts have stated each companies might want to search various companions in the long run, to strengthen competitiveness within the know-how race, and Foxconn may very well be an choice.

Nissan loss

Nissan stated Thursday it anticipated a internet lack of 80 billion yen ($520 million) for the 12 months to March, sharply down from 426.6 billion yen revenue achieved within the earlier 12 months.

Honda individually reported a internet revenue of 805.3 billion yen for the 9 months to December.

This was a 7.4 % decline on-year mainly resulting from a decline in gross sales in China, despite the fact that general gross sales elevated 8.9 % to 16.3 trillion yen.

Honda made a slight change in its gross sales forecast for the total 12 months to March, to 21.6 trillion yen from 21.0 trillion yen within the earlier estimate, however saved its working and internet revenue forecasts at 1.42 trillion yen and 950 billion yen, respectively.

© 2025 AFP