Japan’s Nissan and Honda have said that their boards have voted to end talks over a merger that would have created a $60bn (£48bn) auto group, but added that both companies would continue to cooperate in electric vehicles.
A merger would have spawned the world’s fourth-biggest carmaker by vehicle sales after Toyota, Volkswagen and Hyundai.
Nissan, Japan’s third-largest automaker, backed out of the talks with its larger rival Honda after negotiations were complicated by growing differences, including Honda proposing that Nissan become a subsidiary, Reuters previously reported.
The automakers, and junior partner Mitsubishi Motors, had announced they would consider the merger late last year. Mitsubishi was unlikely to participate, reports 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 trio said in a statement.
The key China market and the car industry in general have been upended by the rapid rise of Chinese electric vehicle (EV) makers such as BYD. Nissan and Honda, like other carmarkers, are facing the prospect of tariffs in the US, another major market.
Nissan is pushing ahead with a restructuring plan, announced in November, that includes cutting 9,000 jobs and reducing global capacity by 20%. It has yet to disclose details such as which locations will be affected.
The announcement will cause uncertainty for the company’s 130,000-strong workforce. However, it is thought the UK factory in Sunderland is unlikely to be affected.
Before announcing the merger discussions in December, Nissan and Honda had been holding separate talks on a technology collaboration, which they could outline the scope of later on Thursday.
Nissan is now open to working with new partners, with Taiwan’s Foxconn seen as one candidate, Reuters reported last week.
after newsletter promotion
The Foxconn chair, Young Liu, said on Wednesday that it would consider taking a stake in Nissan but that its main aim was cooperation. Foxconn produces iPhones in China for Apple.
Nissan has been hit harder than others by the EV shift, having never fully recovered from years of crisis sparked by the 2018 removal and arrest of its former chair Carlos Ghosn.
The company’s market capitalisation is now nearly five times smaller than that of Honda, which is about 7.5tn yen (£39bn). A decade ago, the pair were both worth about 4.6tn yen.
