After signing a memorandum of understanding (MOU) on December 23, 2024, to explore a merger between Japanese automakers Honda, Nissan, and Mitsubishi to form the world’s third largest car company, the deal has been terminated.
The goal of the deal was to improve the firms’ competitiveness, but company leadership was unable to find a path forward, stalled by the inability to adopt nimble management and decision-making practices in an increasingly volatile market.
Nissan indicated its displeasure with the shift from the parties forming a joint holding company into what felt like a takeover by Honda, which would be the parent company and Nissan the subsidiary through a share exchange.
The three will still follow through on a separate MOU to form a strategic partnership “aimed at the era of intelligence and electrified vehicles” to the benefit of each company and their respective competitiveness amidst falling sales in China and growing competition, especially when it comes to the EV market.
Honda remains strong while Nissan struggles and undergoes a restructuring that will see 6,500 jobs cut in the U.S. and Thailand, as well as one-fifth of its senior managers in the financial year ending March 31, 2027. Honda has denied a hostile takeover of Nissan following the breakdown of the merger talks and claims that it had never seriously considered the idea and will not pursue it going forward.
