Honda and Nissan have officially called off their merger talks, ending plans to create the world's third-largest automotive group. The decision comes after differences emerged between Japan's second- and third-largest carmakers.

Key Points

  • Honda and Nissan terminate their memorandum of understanding (MOU) signed in December 2024
  • Mitsubishi also confirms it will remain independent
  • Disagreement over proposed structure led to the breakdown

Reasons for Termination

The main reason for ending the merger talks was a disagreement over the proposed structure. Honda suggested changing the plan from a joint holding company to one where Nissan would become a subsidiary of Honda through a share exchange.

Nissan stated, "To prioritise speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the MOU."

Honda and Nissan End Merger Talks, Remain Independent

Future Collaboration

Despite the merger's cancellation, Honda, Nissan, and Mitsubishi will continue their collaboration announced in 2024 for future "intelligence and electrified" cars. This may include:

  • Shared hybrid and electric powertrains
  • In-vehicle software development

Financial Implications

The announcement coincided with the release of both companies' financial results:

  • Honda: 7% operating margin
  • Nissan: 0.7% operating margin, with a 414% drop in operating profit compared to 2023

Nissan has revised its outlook for the financial year, expecting a net loss of 80 billion yen (AU$828 million). The company plans to implement "comprehensive turnaround actions" including:

  • 2500 global job losses
  • Restructuring at manufacturing plants in the US and Thailand

Moving Forward

As the automotive industry continues to evolve, both Honda and Nissan will face challenges in the competitive electric vehicle market. While the merger is off the table, their ongoing collaboration may still yield benefits in developing new technologies and reducing costs.

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