Honda, Nissan and Mitsubishi all announced December’s memorandum of understanding had been terminated, killing the potential merger of the three automakers.
After rumors swirled last week about Nissan, Honda and Mitsubishi scuttling plans to merge shortly after announcing a formal memorandum of understanding (MOU), all three confirmed partnership talks are off Thursday. This means the deal that would have created the world’s third largest automaker is officially dead, as is the direct co-development of next-generation vehicles among the three.
However, even with the partnership dead, the Japanese automakers aren’t walling themselves off completely. Instead, according to Thursday’s memo, they will still collaborate on electrified vehicles and software development. At this point, it’s unclear exactly how such collaboration would play out. With the full-scale merger entirely dead, a lot is still up in the air, especially when it comes to Nissan’s future prospects as well as potential vehicles the partnership could have gestated.
Leading up to this announcement, earlier reports cited sticking points on both sides preventing the merger talks from moving forward. Nissan’s recent financial troubles and restructuring worried Honda executives. As for Nissan’s part, their executives supposedly pulled the plug due to Honda’s undervaluation of the company and concerns it would not have the status it aimed for in the resulting entity. As Nissan is already part of a three-automaker alliance with Mitsubishi and French automaker Renault, and it was unclear how that would have been resolved as each company owns at least some stake in the others (Renault, for instance, owns 15% of Nissan).
Now, the focus once again returns to Nissan’s financial future and what it might do moving forward. In some respects, Renault may hold the key as Taiwan’s Foxconn — one of the largest iPhone manufacturers — is reportedly exploring a deal to buy out that 15% stake, if it is up for grabs.
