Nissan and Honda's merger discussions, aimed at creating one of the world's largest automotive groups, have reached an impasse due to Honda's concerns over Nissan's financial health. Since announcing the potentially transformative deal, Honda has sought greater control in the proposed structure, aiming for a scenario where Nissan operates as its subsidiary—something Nissan has not accepted. While Nissan grapples with declining sales and necessary operational cuts, Honda views stabilization as a prerequisite for any merger. The collaboration was expected to help both companies share the burdens of transitioning to electric vehicles, but unresolved tensions remain.
From the beginning of the merger talks, a number of executives at Honda were sour on the idea of merging with Nissan, concerned about its financial state.
Nissan has been reckoning with a drop in sales that has pushed it to make deep cuts to its global operations.
As it performed its own analysis, examining factors including projections of the profitability of Nissan models, the company decided it needed to lay down strict conditions for a merger.
The deal was viewed as a lifeline for Nissan in particular. Honda retains a profitable two-wheeler business, but both automakers are struggling under the weight of the difficult and expensive transition toward electric and software-laden vehicles.
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