Merger negotiations between Nissan, Honda and Mitsubishi have been dropped, the car makers have said in a joint statement.
Confirmation that talks were abandoned comes after Honda had proposed to make Nissan a fully owned subsidiary, rather than an equal partner in a joint holding company as had been set out when negotiations were announced just before Christmas. The firms had shocked the global automotive market with December's announcement, which came amid severe financial challenges for Nissan.
The Qashqai-maker, which operates its key Sunderland plant, saw plummeting operating profits in half year 2024 results. That prompted an urgent restructuring plan that involved cutting 20% of its global production and losing about 9,000 jobs - with CEO Makoto Uchida even volunteering to halve his salary.
READ MORE: {}
It remains unclear how those plans could impact the Wearside factory, which has been the centrepiece of the manufacturer's electric vehicle production plans involving billions of pounds of investment into renewable energy sources and battery production. Nissan's majority owned transmission supplier Jatco also recently announced it was setting up nearby to support the efforts.
The breakdown in merger plans means Nissan is likely to seek another partner. There have been reports that Taiwanese technology company Foxconn is interested in acquiring a stake.
A statement from the firms said: "Nissan Motor Co., Ltd. and Honda Motor Co., Ltd., today agreed to terminate the MOU signed on December 23 last year for consideration of a business integration between the two companies.
"Since signing the MOU, the management teams of both companies, including the chief executive officers, have discussed and considered the surrounding market environment, the objectives of the business integration, and the management strategies and structures post-integration. Additionally, taking into account the importance of a business integration, both companies have carefully consulted with various stakeholders.
"During the discussions between the two companies, various options were considered regarding the structure of the business integration. Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU, to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.
Most Read
"As a result of these discussions, both companies concluded that, to prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the MOU.
"Going forward, Nissan and Honda will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles, striving to create new value and maximize the corporate value of both companies."