Islamabad, Feb 14: Honda and Nissan have officially abandoned their merger talks, which were initially announced in December 2024. The two Japanese automakers had planned to unite under a new holding company to strengthen their position against rising competition from Tesla and Chinese electric vehicle (EV) manufacturers. However, after weeks of negotiations, both companies decided to terminate their Memorandum of Understanding (MoU) and end discussions.
The proposed merger would have created the world’s third-largest automaker, significantly enhancing their presence in the global EV market. However, disagreements over the structure of the deal led to its collapse. Honda insisted on making Nissan a subsidiary rather than forming an equal partnership, a proposal Nissan strongly opposed. The impasse proved insurmountable, bringing the negotiations to an abrupt halt.
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Mitsubishi Motors, which had initially shown interest in joining the Honda-Nissan alliance, has also withdrawn from the plan. While the three automakers will continue collaborating on electric and smart vehicle technologies, any prospects of a formal merger have been ruled out.
Despite the failed talks, financial concerns remain a pressing issue for both Honda and Nissan. Honda recently reported a 7% decline in profits, while Nissan is bracing for a $518 million annual net loss due to sluggish sales. As a result, Nissan is shifting its focus toward a large-scale restructuring plan, which includes cutting 9,000 jobs and reducing global production.
Meanwhile, Nissan is actively seeking new partnership opportunities. Reports suggest that Taiwanese electronics giant Foxconn has shown interest in collaborating with the Japanese automaker, though there are no plans for an acquisition.
The collapse of the Honda-Nissan merger underscores the mounting challenges faced by traditional automakers as they attempt to navigate the evolving EV landscape. With Tesla, BYD, and other global EV giants rapidly expanding their market dominance, Honda and Nissan must now explore alternative strategies to stay competitive in an industry undergoing rapid transformation.
