Honda and Nissan abandon merger, Japanese automakers' attempt to band together fails?

Honda and Nissan's integration plan has reached the brink of bankruptcy. On Wednesday, February 5th, according to Nikkei News citing informed sources, Nissan Motor will suspend merger talks with Honda Motor because the two Japanese automakers failed to reach a consensus on the terms of the deal. This also means that the merger plan, originally intended to create the world's third-largest automotive group, is at risk of failure. The report stated that in December last year, Honda and Nissan officially initiated merger talks, with both companies planning to establish a new holding company by 2026, with both parties as subsidiaries of this holding company to facilitate the merger. However, in recent days, Honda suddenly proposed making Nissan a wholly-owned subsidiary, to which Nissan strongly opposed, believing this move undermines the originally planned equal structure. Nevertheless, Nissan and Honda will continue to pursue existing collaborations in the merger talks, including cooperation in software and electric vehicles. Honda stated that it will continue discussions with Nissan regarding potential merger matters and plans to formulate a rough plan by mid-February. Following the announcement, the market reacted sharply; as of the time of writing, Honda Motor surged over 11%, while Nissan Motor's stock price turned from gains to a decline of over 4% due to market concerns about its future development uncertainty. Analysts believe that the failure of the merger talks between Honda and Nissan will pose greater challenges for Nissan in the global market, especially in key markets such as the Americas and China. Amid the wave of global electrification transformation, Nissan faces the most severe challenges in its history among all Japanese automakers, with severe overcapacity on one hand and the gradual elimination of traditional automotive product lines from the market on the other, forcing Nissan to significantly cut jobs and slash its annual profit guidance by 70%