Tunji Faleye with agency reports
Many car-loving Nigerians and others across the globe, waiting patiently to enjoy what the new $60 billion merger between Nisan and Honda will bring to the global auto market will be unhappy as the merger on Thursday (today) ended abruptly.
The new car company proposal by the two car makers was strained by disagreement, as Honda proposed to make Nissan its subsidiary.
Despite the failed merger, both automakers along with Mitsubishi Motors will continue collaborating on technology and other strategic areas as part of a prior agreement.
Industry analysts emphasize the importance of such alliances as established car manufacturers face growing competition from Chinese electric vehicle (EV) makers like BYD, which are rapidly gaining market share with innovative, software-driven models. In addition, Japanese automakers must contend with potential U.S. tariffs on vehicles imported from Mexico, a key production hub.
Nissan, in particular, has struggled to recover from the turmoil following the 2018 arrest and removal of former chairman Carlos Ghosn. Had the merger succeeded, it would have formed the world’s fourth-largest automotive group by sales, trailing only Toyota, Volkswagen, and Hyundai.
At a press conference, Honda CEO Toshihiro Mibe acknowledged that while merging the two companies would have involved “quick pain,” he ultimately feared prolonged negotiations without progress. He confirmed that Honda had no intention of pursuing a hostile takeover of Nissan and expressed disappointment over the failure of the discussions.
Renault, Nissan’s largest shareholder, also opposed the proposed merger terms, citing the lack of a premium as a key concern.
Meanwhile, Nissan continues to face financial challenges, recently lowering its full-year forecast for the third time. The automaker reported another significant drop in third-quarter earnings and announced an acceleration of its turnaround strategy. As part of this plan, Nissan aims to shut down its Thailand plant by June, with additional closures expected in the near future. Previously, the company had disclosed plans to cut 9,000 jobs and reduce global production capacity by 20%.
During a press briefing, Nissan CEO Makoto Uchida underscored the urgency of stabilizing the company before considering a leadership transition. “If I can see a clear path forward for the company’s revival, I will naturally be ready to pass the baton to the next leader,” he said.
Nissan has indicated that it will explore new partnership opportunities as part of its ongoing review and is expected to provide an update on its recovery strategy within a month.
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