The rumored merger between Honda and Nissan has been called off.
After a week of speculations, both automakers confirmed that they’re terminating their Memorandum of Understanding (MOU) signed on December 23, 2024.
What Happened?
The initial plan was for a three-way merger between Honda, Nissan, and Mitsubishi Motors, with Nissan as the largest shareholder.
However, things didn’t go as planned. Honda proposed a change in the structure, which would have made Honda the parent company and Nissan a subsidiary.
This didn’t sit well with Nissan, and the talks eventually fell apart.
What’s Next for Nissan and Honda?
Nissan and Honda will still collaborate on a strategic partnership focused on intelligent and electrified vehicles.
This partnership was announced in August 2024, before Nissan’s financial problems became apparent.
Honda is in a better financial position, with a market capitalization four times that of Nissan.
It already has a relationship with General Motors to develop hydrogen fuel cell technology.
Nissan’s Future Looks Uncertain
Nissan, on the other hand, needs a partner to help turn its financial situation around. The company announced a quarterly net loss of ¥9.3 billion ($92.5 million) in November 2024, with operating profits down 85% compared to the same period a year earlier.
Nissan has a new turnaround plan, which includes reducing production capacity by 20% and letting go of 9,000 employees globally.
Could Foxconn Be Nissan’s New Partner?
With the collapse of the Honda-Nissan merger, there might be renewed talks between Nissan and Taiwanese firm Hon Hai Precision Industry, also known as Foxconn.
Foxconn has been looking to diversify into the automotive industry and has already unveiled its MIH electric vehicle architecture.
What Could Have Been
If the merger had gone ahead, the new company would have become the world’s third-largest automaker, with total sales of around 8.25 million vehicles.
However, it seems that this is no longer happening. For now, we can only speculate about what the future holds for these two automotive giants.