Japanese automotive giants Honda, Nissan, and Mitsubishi revealed Thursday they are ceasing discussions regarding a potential business integration, The Associated Press reports.
The automakers confirmed the termination of their collaboration structure agreement in a joint statement.
The initial talks, announced in December, involved Honda and Nissan exploring the formation of a joint holding company, with Mitsubishi considering joining the partnership. The effort, however, has been met with skepticism from analysts who questioned the potential benefits given the overlap in the companies’ product portfolios and strengths, particularly in the face of industry-wide disruption from electric vehicle (EV) leaders like Tesla and BYD and the broader shift towards electrification.
While the specifics surrounding the collapse of the negotiations remain undisclosed, the abrupt halt contradicts the initial timeline of finalizing an agreement by June and establishing the holding company by August.
The dissolution of the talks comes amidst recent reports in Japanese media suggesting the deal was unraveling. Citing unnamed sources, some reports indicated that Nissan resisted becoming a minor partner in the proposed structure, with Honda reportedly slated to take the leading role in the joint executive team due to its stronger financial standing.
The news follows a period of financial strain for Nissan, which reported a loss for the July-September quarter due to declining vehicle sales. The company has since announced the elimination of 9,000 jobs, with Chief Executive Makoto Uchida taking a 50% pay cut to acknowledge responsibility for the results.
Despite the failed integration, Honda, Nissan, and Mitsubishi affirmed their commitment to continued collaboration in key areas like electric vehicles and smart car technologies, including autonomous driving.
