Things are going from bad to worse for Nissan Motor as its lifeline merger with Honda Motor has officially been called off. The $60 billion merger could have propelled the two companies to become the fourth largest automobile manufacturer, behind Toyota, Volkswagen, and Hyundai. In a joint statement, Nissan and Honda announced the cancellation of their MOU regarding the potential structure of a tripartite collaboration. This follows the termination of the MOU signed on December 23 last year, which had explored the possibility of a business integration between Nissan and Honda, with Mitsubishi Motors Corporation also involved in the deal.
So what next for Honda, Nissan?
Even though the two Japanese giants are walking away, Honda and Nissan have confirmed that they will continue their collaboration under the framework of a strategic partnership, focusing on technology sharing and electric vehicles. This was formalised through the MOU signed on August 1 last year. It will allow both companies to strengthen their positions in the electric vehicle segment, which is dominated by Chinese manufacturers. Honda and Nissan now face the looming threat of potential US tariffs.
Reports suggest that internally, Honda faced a lot of resistance to merging with Nissan, especially after the latter shockingly revised its profit forecast down by 70 per cent due to dwindling sales in the US and China. Nissan had also earlier announced plans the slash 9,000 jobs globally and reduce its production capacity by 20 per cent.
New suitor for Nissan: Foxconn
Foxconn is looking to strengthen its position in the electric vehicle segment and is interested in partnering up with Nissan. According to a Reuters report, Foxconn chairman Young Liu acknowledged that the company is interested in expanding its footprint electric vehicle market and is not looking to acquire Nissan. Based on reports, the Japanese car maker is also open to working with Foxconn as a technology partner. Nissan is one of the first automobile manufacturers to invest in battery powered mobility and brings in a lot of expertise and resources to the table.
