TOKYO: Honda Motor Co. and Nissan Motor Co. said Thursday they have scrapped a historic realignment plan to merge into what would have become the world’s third-biggest auto group by volume, as negotiations collapsed less than two months after its announcement.
But Honda and Nissan, Japan’s second and third largest automakers, will continue their strategic partnership in developing software and other fields, together with Mitsubishi Motors Corp., Nissan’s alliance partner, they said.
The two companies had said in December that they hoped to conclude negotiations in June 2025 and establish a holding company in 2026 under which the two brands would operate.
The two carmakers had sought to cut costs by sharing the growing financial burden of developing electric vehicles and software to better compete with global rivals such as U.S. Tesla Inc. and China’s BYD Co.
When they revealed their plan to begin merger talks at a press conference in December, Honda said struggling Nissan would need to boost its turnaround efforts as a condition for the deal.
In November, Nissan said it would cut 9,000 jobs worldwide and reduce its global production capacity by 20 percent.
But Nissan’s plans failed to convince Honda that the slumping carmaker is on track for a successful turnaround, sources familiar with the matter have said.
Honda recently proposed to make Nissan its subsidiary, fearing that slow progress in the automaker’s revamp could jeopardize the future path of the merger. The move, however, riled Nissan’s board and caused it to tilt toward scrapping the plan, according to the sources.
Honda and Nissan initially said they would unveil the details of their tie-up plan by the end of January but pushed it back to mid-February.–KYODO NEWS
