In a significant shift within the automotive industry, Japanese car manufacturers Honda, Nissan, and Mitsubishi announced on Thursday that they will terminate discussions regarding a business integration.
During a press briefing, Nissan’s CEO Makoto Uchida highlighted that the dialogue had evolved from creating a joint holding company to the notion of Nissan functioning as a subsidiary under Honda’s umbrella. He expressed his concerns, stating, “The aim was to collaborate for success in the global market; however, this approach would not enable Nissan to achieve its full potential, which is why I could not agree to it.” Uchida further indicated that Nissan would now pursue its recovery plans independently of Honda.
Toshihiro Mibe, the CEO of Honda, expressed his disappointment at the outcome during a separate media session. He mentioned that Honda had proposed a stock swap to facilitate quicker decision-making processes. “I am really disappointed,” Mibe remarked, acknowledging the considerable potential of their partnership, but insisted that difficult decisions would be essential to realize such opportunities.
Both manufacturers released a joint statement confirming their decision to cease exploring collaborative structure options. The dialogue had initially commenced in December, with Honda and Nissan discussing the establishment of a joint holding company, and Mitsubishi Motors considering joining the initiative.
Industry analysts were initially skeptical about the proposed collaboration, questioning the benefits for the involved companies given their overlapping vehicle lineups and the challenges posed by emerging competitors like Tesla and BYD, alongside the industry’s shift toward electric vehicles. Honda and Nissan had originally aimed to finalize an agreement by June, with plans to establish the holding entity by August.
Despite the abandonment of integration talks, the three companies affirmed their commitment to collaborating on projects related to electric vehicles and smart technologies, including autonomous driving.
Recent reports from Japanese media had suggested that the negotiations were faltering, citing anonymous sources. Some speculated that Nissan was hesitant to assume a secondary role in the collaboration with Honda. Mibe dismissed these rumors, including those concerning Taiwan’s Foxconn contemplating an investment in Nissan.
Financially, Honda is currently in a more favorable position and was expected to lead the proposed joint management team. However, Honda reported a 7% decline in profits for the period from April to December 2024, totaling 805 billion yen (approximately $5 billion). Meanwhile, Nissan faced challenges, reporting losses during the July to September quarter as vehicle sales plummeted, leading to a workforce reduction of 9,000 employees. In response to the company’s difficulties, Uchida agreed to a 50% reduction in his salary to take accountability for the disappointing results.
