Despite the scrapped merger, Honda and Nissan, Japan's second and third-largest automakers, respectively, will continue their strategic partnership in software development and other fields, alongside Mitsubishi Motors Corp, Nissan's alliance partner, the companies said.
In December, both firms had aimed to finalise negotiations by June 2025 and establish a holding company by 2026, under which their brands would operate.
The merger was expected to help cut costs and ease the growing financial burden of developing electric vehicles and software, allowing them to better compete with global rivals such as Tesla Inc and BYD Co.
At the time of the announcement, Honda had set Nissan's turnaround efforts as a condition for the deal.
However, sources familiar with the matter said Honda remained unconvinced of Nissan's recovery trajectory, particularly after the automaker announced in November that it would cut 9,000 jobs worldwide and reduce global production capacity by 20 per cent.
Concerned about Nissan's slow progress, Honda recently proposed making Nissan its subsidiary to protect the future direction of the merger, the sources said.
The move, however, was met with resistance from Nissan's board, ultimately leading to the collapse of negotiations.
The two companies had initially planned to unveil details of their partnership by the end of January but delayed the announcement to mid-February.
-- BERNAMA
