Japanese automakers Honda, Nissan and Mitsubishi end talks on integrating their businesses

Japanese automakers Honda, Nissan, and Mitsubishi announced Thursday they are ending talks on business integration. Nissan Chief Executive Makoto Uchida said the talks had shifted focus from establishing a joint holding company to making Nissan a subsidiary of Honda.

“The intent was to join forces to win in the global competition, but this was not going to realize Nissan’s potential, so I could not accept it,” he told reporters. He added that Nissan would aim for a turnaround without Honda.

Honda Chief Executive Toshihiro Mibe said in a separate news conference that Honda had suggested a stock swap to speed up decision-making. “I am really disappointed,” Mibe told reporters. “I felt the potential was great, but I also knew actions that would bring pain were necessary to realize that.”

The automakers agreed to end their agreement on considering a structure for a collaboration, a joint statement said. The decision was passed by board meetings at each of the companies.

Honda and Nissan announced in December they would hold talks to establish a joint holding company. Mitsubishi had said it was considering joining that group.

From the start, the effort had analysts puzzled about the advantages to any of the companies, as their model lineups and strengths overlap in an industry shaken by the arrival of powerful newcomers like Tesla and BYD, as well as the move to electrification.

Honda and Nissan initially said they were trying to finalize an agreement by June and establish the holding company by August. The three automakers will continue to work together on electric vehicles and smart cars, such as autonomous driving, they said Thursday.

In recent weeks, Japanese media published various reports, citing unidentified sources, about the talks breaking down. Some said Nissan balked at becoming a minor player in the partnership with Honda.

Mibe denied he knew or heard anything about the media speculation that Taiwan’s Foxconn was considering taking a stake in Nissan. Uchida also denied having held any official talks with Foxconn but stressed that various options would be considered as Nissan attempts a turnaround, promising a more detailed turnaround plan within a month.

Honda is in far better financial shape and was to take the lead in the joint executive team. Honda reported Thursday that its April–December 2024 profits declined seven percent to 805 billion yen (5 billion dollars).

Nissan reported a loss for the July–September quarter as its vehicle sales sank, prompting it to cut 9,000 jobs. At that time, Uchida took a fifty percent pay cut to take responsibility for the results.

On Thursday, Nissan reported that its April–December profit crashed to 5.1 billion yen (33 million dollars) from 325 billion yen (2.1 billion dollars) last year and projected losses of 80 billion yen (519 million dollars) for the full fiscal year through March.

When asked by reporters if he would resign to take responsibility for Nissan’s results, Uchida expressed openness to departing but said it was the board’s decision.