Negotiations for the $60 billion merger between Japan’s Nissan Motor Co. and Honda Motor Co. collapsed on Thursday following disagreements over control.
Despite the breakdown, both automakers affirmed their commitment to continuing collaboration on electric vehicle (EV) technologies.
Sources familiar with the talks revealed that discussions were hindered primarily by Honda’s proposal that Nissan become a subsidiary in the potential merger.
The deal would have created the world’s fourth-largest automaker by sales and strengthened the Japanese brands against surging competition from Chinese electric vehicle giants.
“Honda is pretty confident and has a lot in their favour, whereas Nissan is in a bad place. They don’t have a dance partner right now,” said Christopher Richter, Japan autos analyst at CLSA. “They probably need to think about doing something different.”
The failed merger showed Nissan’s ongoing struggles. Once a dominant player, the automaker has faced turbulence since the 2018 arrest of former chairman Carlos Ghosn, which triggered years of management turmoil.
Nissan is currently pushing forward with a restructuring plan announced in November, which includes cutting 9,000 jobs and reducing global production capacity by 20%.
As part of its restructuring, Nissan is scaling back operations in China, a key market where it operates eight factories through its joint venture with Dongfeng Motor.
The company has already suspended production at its Changzhou plant in efforts to optimise operations.
Meanwhile, Nissan is seeking new strategic partnerships. Sources indicate that Taiwan’s Foxconn is being considered as a potential partner. Foxconn Chairman Young Liu commented on Wednesday, stating, “It would consider taking a stake in Nissan, but that its main aim was cooperation.”
Nissan and Honda initially sparked investor excitement when merger discussions were reported on December 17, causing Nissan shares to surge over 60% and Honda’s by 26%.
However, those gains have since moderated, with Nissan’s shares up 21% and Honda’s 11% from pre-merger talk levels.
Honda’s market capitalization, currently at approximately 7.5 trillion yen ($48.6 billion), is now nearly five times larger than Nissan’s, which once stood on equal footing with Honda a decade ago.
Despite the setback, both companies reiterated their commitment to a strategic partnership focusing on EV technology, stating, “Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.”
With Honda out of the picture, Nissan’s path forward remains uncertain, but the company’s readiness to engage new partners signals that the search for a new ‘dance partner’ is far from over.
