Honda-Nissan merger talks collapse but EV partnership to continue

Talks between Nissan and Honda have ended that would have seen the Japanese car manufacturing giants, along with junior partner Mitsubishi, join forces.

Fleet News first revealed the carmakers’ plans in December, which if successful would have created the world’s third largest manufacturer by volume.   

In a joint statement, published today (Thursday, February 13), they said: “Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.”

The new alliance aimed to strengthen their presence in the expanding electric vehicle (EV) market, where Chinese manufacturers, including BYD, have gained significant ground. 

The dominance of Chinese-made EVs has posed a serious challenge to some of the industry’s most iconic brands.

“The structure of the automobile industry is evolving, driven by the rise of Chinese power and other emerging forces,” Honda’s chief executive Toshihiro Mib told reporters during a press conference discussing the merger talks last year.

In the joint statement released today, it said that during the discussions between the two companies, various options were considered regarding the structure of the business integration. 

It added: “Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU (memorandum of understanding), to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.

“As a result of these discussions, both companies concluded that, 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.”

China’s competitive advantage, rooted in lower labour and manufacturing costs, has enabled its carmakers to produce and price vehicles more competitively than most European and Japanese vehicle manufacturers.

As a result, China has become the world’s largest producer of electric vehicles, reshaping the global automotive landscape.