After about three months since signing the Memorandum of Understanding (MoU) to form the world’s third-largest carmaker, Honda and Nissan have mutually agreed to terminate any further plans of the merger. However, the two Japanese carmakers, along with Mitsubishi, will still keep in touch to develop electric vehicles (EV) and software together.
In a joint press release released by the two Japanese carmakers, the companies stated that during discussions, Honda proposed a structure change that will make Honda the parent company, with Nissan as its subsidiary through a share exchange.
The change in proposal is against what was initially outlined in the MoU, where the two companies will establish a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer.
As a result of the discussions, the companies agreed that they would terminate the MoU “to prioritise speed of decision-making and execution of management measures in an increasingly volatile market environment”, the press release read.
Separately, another MoU between Honda, Nissan, and Mitsubishi for a “tripartite collaboration” has also been terminated. However, the companies said that they will still continue their existing collaboration on vehicle intelligence and electrification, based on a separate MoU signed August 1 last year.
The discussions between the companies were met with many roadblocks, particularly due to Nissan’s complicated relationship with Renault and Mitsubishi, coupled by its financial woes that has limited its ability to reacquire its shares that were owned by Renault – a move that Honda has reportedly requested.
Following the breakdown in merger talks, Nissan is reportedly now searching for other prospective partners. A likely candidate has emerged in the form of Foxconn, a Taiwanese manufacturer most known for building iPhones, who has one foot in the EV space under its Foxtron subsidiary.
READ: Who will save Nissan? Japanese brand in talks with new partners after Honda merger collapse
