Nissan CEO Makoto Uchida informed Honda counterpart Toshihiro Mibe that the company would end merger discussions after Honda proposed making Nissan a subsidiary, Reuters reported on Thursday.
The two Japanese automakers had signed a memorandum of understanding (MOU) in December to explore an integration under a holding company, aiming to create the world’s third-largest automaker and strengthen competitiveness in a challenging industry. However, Reuters reported that the talks stalled due to growing differences.
“A consensus was reached (on Nissan’s side) that the talks cannot proceed under that proposal,” the source said, declining to be identified as the information is not public. Nissan is expected to formalise its decision to withdraw from the MOU at a board meeting before its third-quarter earnings announcement next week, the source added.
Honda remains firm in its position that integration would only proceed if Nissan agrees to become a subsidiary, according to Japanese public broadcaster NHK.
Honda is Japan’s second-largest automaker behind Toyota, while Nissan ranks third. Both companies declined to comment on the talks, reiterating earlier statements that they aimed to determine a future direction by mid-February.
The collapse of negotiations raises concerns over Nissan’s strategy to navigate its ongoing turnaround without external support. The company has already announced plans to cut 9,000 jobs and reduce global production capacity by 20%.
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