Proposed Merger of Japanese Carmakers Honda, Nissan Collapses

The BBC is reporting that merger talks between Honda and Nissan have collapsed after the firms failed to agree on a multi-billion-dollar tie-up.

The Japanese carmakers, along with junior partner Mitsubishi, had aimed to combine their businesses to fight back against competition from rival firms, especially in China.

The merger would have created an auto group worth US$60 billion, and the world’s fourth-largest by vehicle sales after Toyota, Volkswagen and Hyundai.

The companies said they would continue their partnership on electric vehicles.

The planned tie-up was seen as providing Nissan, which for a while was Japan’s second-largest car company, with crucial relief following years of slowing sales and turmoil involving its top executives.

Both Nissan and Honda are also facing the prospect of tariffs in the United States, another major market.

In November, Nissan surprised shareholders with plans to lay off thousands of workers to tackle a drop in sales in China and the US.

The growing electric car market has been increasingly dominated by Chinese manufacturers, such as BYD.

This increased competition has left many of the world’s leading carmakers struggling to compete.