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Cnn
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Nissan and Honda in Japan ended the discussions on an agreement that would have created the third car manufacturer in the world.
The two companies, as well as their junior partner Mitsubishi Motors, agreed to “end” a memorandum of understanding to obtain their forces, said Nissan a declaration THURSDAY.
“In the future, Nissan and Honda will collaborate within the framework of a strategic partnership intended for the era of intelligence and electrified vehicles, striving to create a new value and to maximize the value of the company of Two companies, “he said.
Nissan and Honda had announced in December that they would start discussions over the following six months on a possible merger, in an agreement which would have given them more firepower to compete with the growing competition of Chinese car manufacturers like Byd.
The agreement was motivated by the need to combine their resources to remain competitive as industry goes to electric vehicles. However, after only a few weeks of talks, the negotiations seemed to stall.
During discussions, various options were taken into account concerning the structure of commercial integration, according to the press release.
Honda proposed to modify the structure of the planned merger of a joint portfolio company, as initially agreed, to an agreement with Honda as a parent company and Nissan its subsidiary through an exchange of shares. The two companies finally concluded that it was better to “stop discussions,” added the press release.
Nissan has been struggling since the collapse of his longtime alliance with the French automaker Renault. He faces serious financial problems that desperately needed them with a more important partner. Some analysts had supposed that Nissan could go bankrupt in 2026, when he has a huge debt to come.
Nissan’s profits within six months ending in September plunged 94% compared to the same period in 2023, because the company lost money on car operations and has declared only a close profit due to of its financing activity. In response, Nissan announced that it would reduce its production of 20%manufacturing, dismissing 9,000 workers accordingly. He also reduced his operating profit forecasts in the 70%full year.
Beyond its financial problems, Nissan – like most inherited car manufacturers – faces enormous research and development costs in the transition from the manufacture of electric to electric propulsion vehicles necessary to comply with stricter environmental regulations in the world.
The company has been successful with its electric vehicle offers, such as the Nissan Leaf, an asset it brought to the table in fusion discussions.
According to analysts, EV development costs have created a powerful incitement for car manufacturers to explore mergers as a means of sharing the financial burden.
“Nissan is in a delicate position after the collapse of its melting talks of $ 60 billion with Honda. The Japanese car manufacturer will seek a new business with whom to associate, ”said Lucinda Guthrie, Mergermarket chief on Wednesday.
“While technology is progressing, players may have to consider more steps towards the manufacture of” wheel robots “rather than combustion engine vehicles, it may well be the case that large technological companies and manufacturers Electronic components, such as Foxconn, become crucial partners, “she added.
The Taiwanese manufacturer of electronics, better known for being the main supplier of Apple, confirmed that he wanted to speak with Nissan to work together, its president, Young Liu, Tell to journalists Wednesday. Foxconn is not interested in acquiring the automaker, he added.
Since 1999, Nissan has been in an alliance with Renault. The two agreed in January 2023 to restructure their partnership, the French company reducing its participation in the 15%Japanese car manufacturer, an important step in their long collaboration.
The car manufacturers had worked in tandem, alongside the junior partner Mitsubishi Motors. The Alliance had allowed them to share production and technology and, ultimately, save billions of dollars a year. But the regrouping collapsed after the astonishing fall of his former chief Carlos Ghosn in 2018.
This story has been updated with additional information and a context.