Honda, Nissan End Merger Talks, Shift Focus to EV Collaboration

Honda and Nissan have officially ended their merger talks after negotiations that began in December 2022, opting instead to focus on a strategic partnership with Mitsubishi Motors aimed at enhancing digitalization and electrification in vehicles. The companies had hoped that a merger would better position them against competition from Chinese automakers like Tesla and BYD, particularly in the struggling Chinese market, where Nissan has seen significant sales declines. The discussions faltered primarily due to disagreements over control, as Honda proposed that Nissan operate as a subsidiary in a potential merger. Analysts note that Nissan continues to face challenges following management upheaval since the arrest of former chairman Carlos Ghosn and is currently implementing a restructuring plan that includes job cuts and reduced production capacity. Meanwhile, Taiwanese company Foxconn is being considered as a potential strategic partner for Nissan. The decision to abandon the merger marks a significant shift in the companies' strategies to tackle industry pressures.