Honda and Nissan have called off merger talks that would have united two of Japan’s largest automakers, the companies have announced.
The popular car manufacturers confirmed they will continue their partnership on electric vehicles despite ending discussions about combining their businesses.
The partnership, which includes Mitsubishi, had aimed to strengthen its position against growing competition, particularly from Chinese manufacturers.
The merger, which was rumoured to be worth around £48billion or $60billion, would have created a major automotive force alongside industry giants Toyota, Volkswagen, General Motors and Ford.
Do you have a story you’d like to share? Get in touch by emailingmotoring@gbnews.uk
Nissan and Honda have called off plans to merge in a deal that could have been worth £48billion
GETTY
A statement from the two brands said: “Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.”
Honda’s chief executive Toshihiro Mibe had emphasised the urgency of building capabilities to compete with Chinese rivals by 2030, stating: “Otherwise we will be beaten.”
The growing dominance of Chinese manufacturers like BYD in the electric vehicle market has left many traditional car makers struggling to maintain their position.
For Nissan, which was once Japan’s second-largest car maker, the deal could have provided crucial support following years of declining sales and executive upheaval.
Nissan has unveiled an aggressive turnaround strategy aimed at creating a more resilient business model.
The Japanese automaker plans to reduce costs by approximately 400 billion yen (£2billion) by the 2026 fiscal year.
Nissan president and CEO Makoto Uchida said: “Nissan is fully committed to its turnaround actions, aiming to reduce costs by around 400 billion yen. We are dedicated to achieving a more efficient cost structure while driving top-line growth through enhanced competitive products.”
The plan aims to lower the company’s break-even point in its automotive business from 3.1 million units to 2.5 million units by fiscal year 2026. This restructuring is expected to enable a stable operating margin of four per cent.
The restructuring includes significant workforce reductions across Nissan’s global operations with plans to cut 2,500 indirect employees, hiring reductions and voluntary redundancy programmes.
An additional 6,500 positions will be eliminated in vehicle and powertrain plants, with 5,300 cuts in the 2025 fiscal year and 1,200 in the 2026 fiscal year.
The cuts will begin with three plants in the first quarter of fiscal year 2025: Smyrna and Canton in the United States, and operations in Thailand.
Nissan will also expand its shared service centres by 1,000 positions and prioritise fixed marketing expenses to reduce unit labour costs.
LATEST DEVELOPMENTS:
Nissan and Honda will still collaborate on future electric vehicles
REUTERS
The brand also plans to slash its global production capacity by 20 per cent by fiscal year 2026 by cutting capacity to one million units in China and to three million units outside China.
Meanwhile, Taiwanese technology giant Foxconn has emerged as a potential investor in Nissan. Foxconn chairman Young Liu indicated openness to acquiring Nissan shares, said: “If cooperation requires it (purchasing Nissan shares), we will consider it.”
