After days of speculation, their deal was sour, with traditional Japanese automakers Honda and Nissan officially announced Thursday that their combined $60 billion plan is now out of the table.
If their deal is successful, the two giants will create the world's fourth largest auto group based on vehicle sales, providing automakers with a new opportunity to better address challenges faced by their Chinese competitors.
However, through the differences between Nissan and Honda, merger negotiations have become complicated, including a balance of power in cooperation.
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It's from Honda proposal Nissan became the ultimate sunk subsidiary, sources told Reuters.
Honda CEO Toshihiro Mibe told the press conference that he would mean “quick pain” when joining the two companies, but he would eventually be more worried that he would be more worried about the consequences if the negotiations were not progressing. .
He called the failure of the discussion “disappointing” but also said Honda wanted to consider the possibility of bundling with companies other than Nissan and Mitsubishi Motors.
Mitsubishi, junior partner of the Nissan League and Renault league, was part of the merger discussion, although sources said it was unlikely to participate. It also succumbed to the talks on Thursday.
Honda and Nissan said they will continue to reach agreements to cooperate with technology and other fields in advance.
Nissan's most risky
Japanese automakers are currently facing multiple headwinds, the biggest being increasingly competitive from Chinese automakers like Baid, whose market share is eating up compared to sleeker, cheaper and software cars.
The country's automakers are also facing additional threats from tariffs imposed by U.S. President Donald Trump, considering that many of them have export-oriented factories in Mexico.
Nissan is the most troubled among major traditional automakers in many ways, never fully recovered from the crisis and management turbulent era of former chairman Carlos Ghosn's arrest in 2018.
“Honda is very confident and in their favor, while Nissan is in a bad position. They don’t have a dance partner right now.
“They may need to consider doing something different.”
Considering Foxconn
Years of struggle mean Nissan's market value is now five times higher than Honda's, at about 7.5 trillion yen ($48.6 billion). Ten years ago, the two automakers were worth about ¥4.6 trillion.
To show the ongoing trouble Nissan faces, the company cut its full-year forecast for the third time on Thursday.
It also reported another significant decline in quarterly earnings, but said it would accelerate turnaround plans that made its debut last year.
The plan includes reducing global capacity by 20% and cutting 9,000 jobs.
Nissan said it is now open with new partners.
Foxconn, sources told Reuters Will be a candidate Considering the cooperation, the Taiwanese electronics giant said on Wednesday that it will consider equity in Nissan.
It added that cooperation is its primary purpose.
Given the threat posed by Chinese electric car manufacturers, experts say cooperation is crucial to the automotive industry.
- Reuters, other editors of Vishakha Saxena
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