Nissan says merger talks with Honda on, rejects reports of pullout

Japanese automaker Nissan on Wednesday said it is continuing to hold “various discussions” with larger peer Honda, rejecting reports that the company has ended negotiations over their proposed merger. 

News agencies Kyodo and Reuters and business newspaper Nikkei had, earlier, reported that the two companies have ended discussions over their proposed merger.

Neither Honda nor Nissan officially made any statement regarding the current situation, although media reports suggested that the two companies have failed to reach an agreement. 

As per the merger deal, announced in December, the two Japanese companies have six months to conclude negotiations on a possible merger that would place the duo in a better position to fight the growing threat from Chinese carmakers.

In a statement on its website, Nissan said it noted media reports “stating that our company has withdrawn the basic agreement for the merger with Honda” but said “this matter has not been announced by our company.”

Kyodo, citing sources, also said that Nissan objected to Honda’s invite to become its subsidiary..

Also, according to the report, Nissan failed to convince Honda that its proposed restructuring plan will put the automaker back on track, a condition that was key to the planned merger.

Mitsubishi, a third member of the proposed partnership, is already in an alliance with Nissan. Together, the three could become the third largest automaker in the world after Toyota and VolksWagen.

Since its failed alliance with French carmaker Renault, Nissan has been facing severe financial problems and was looking for a bigger and resource rich partner to pull itself out of the crunch.

Nissan saw its profit nosedive 94 per cent year-on-year for the six months ended September 2024. Wile it lost money on automaking, its financing business helped the company earn a small profit.

Nissan saw some success with its electric vehicle, Nissan Leaf, and was banking on it to push the alliance with Honda.

Since then Nissan laid off 9,000 workers and cut production by 20 per cent and full year operating profit by 70 per cent.