The two Japanese car manufacturers confirmed on Thursday that the planned merger between Honda and Nissan has officially been cancelled.
The Japanese business newspaper Nikkei reported earlier this month that Honda and Nissan had stopped discussing a merger. The two car manufacturers announced in December that they were looking at a merger, which would have created the third-largest car manufacturer in the world. In February, the two car manufacturers were supposed to present a plan for further negotiations.
The companies’ intention to join forces was seen as an attempt to catch up with American car manufacturer Tesla and Chinese companies in the electric vehicle market. Honda’s CEO stated in December that it was not a rescue operation for Nissan, which cut thousands of jobs last year after a sharp drop in profits in the first half of the year.
According to local media, the talks collapsed because Honda proposed turning its struggling rival into a subsidiary instead of the original plan to merge the two companies under a new holding company. Honda and Nissan said they would continue to cooperate on electric vehicles.