- Following initial reports from last December of merger talks between Japanese automotive giants Nissan and Honda, the two companies this week have agreed to terminate the memorandum of understanding which aimed to explore a full integration between the two firms.
- Justifying the end of merger talks, the firms cited a need to ‘speed up’ decision making in what they said was an ‘increasingly volatile market environment’, as the industry as a whole largely pivots towards electrified vehicles.
- Despite the talks collapsing, the two manufacturers will continue a separate collaboration agreement covering intelligent and electrified vehicles.
Nissan and Honda agree to cancel memorandum of understanding for merger
The memorandum of understanding, which was originally signed in December 2024, was partly a response to increasing competition in the EV space from Chinese manufacturers such as BYD, and came as both firms struggled to gain a foothold within the electric car market. A couple of months down the line, that remains the case, but the two manufacturers have now decided to largely go their own separate ways.
So far, neither Nissan nor Honda have delved deep into the reasons behind the breakdown in talks – which seemed a real possibility back in December. However, options said to have been explored for a merger included a restructuring in which Honda would appoint the majority of directors, and become the parent company within the merger – whilst Nissan have became a subsidiary.
If such a merger had taken place, which was also set to include a smaller third manufacturer, Mitsubishi Motors, it would have created a new automotive giant worth approximately $60 billion – potentially making it one of the largest automakers in the world, alongside OEMs such as Volkswagen Group and Toyota Motor Corporation. It also would be one of the most significant automotive mergers seen since FCA and PSA merged to create Stellantis back in 2021.
However, the two OEMs will continue their agreed collaboration on electric vehicles and software-defined vehicles (SDVs), which both saying will create ‘new value’ in the market. With high value EVs getting increasingly common, this specific agreement will remain key for both Nissan and Honda.
