Nissan Plans to Call Off Merger with Honda Due to This.

KatadataOTO – Three Japanese manufacturers, namely Honda, Nissan and Mitsubishi, were recently planned to join or merge to strengthen their business. However, one by one, the involved brands have backed out.

The latest news is that Nissan is rumored to be withdrawing from the merger plan for unknown reasons. This was revealed to Reuters by several internal sources who wished to remain anonymous.

Previously, it was known that if the three brands merged, they were projected to become the third-largest automotive manufacturer in the world.

Nissan will also carry out massive job cuts. The total number of workers to be laid off, according to Reuters data, is around nine thousand people, with a 20 percent reduction in sales capacity.

Photo : Nissan

After news of Nissan's withdrawal from the merger circulated, their stock price was said to have dropped four percent on the Tokyo Stock Exchange, while Honda's remained stable and ended with a rise of more than eight percent.

This phenomenon was seen as a form of relief for investors because Honda would not be merged to form a new company with Nissan or Mitsubishi.

There are several suspected reasons for Nissan's cancellation of the merger with Honda, namely the unsuitability of the initial agreement approved by both parties.

However, it is possible that some issues have emerged to smooth out a merger plan that benefits one of the parties.

Reporting from Reuters, Wednesday (5/2), it is highly likely that this is because Honda revealed that instead of a merger, Nissan would become a subsidiary brand of the H-logo manufacturer.

Additionally, there is the policy of import tariffs on vehicles from Mexico proposed by the President of the United States, Donald Trump. According to observers, this would be very detrimental to Nissan and could potentially make Honda hesitant.

Photo : Honda

Mexico itself is one of the most important markets for Nissan and where they produce models like the Kicks for export to 77 countries.

“Nissan also has a greater risk from the impact of US-Mexico import tariffs than Honda and Toyota,” said Vincent Sun, an analyst from Morningstar.

However, when confirmed, both parties in separate official statements asserted that the report did not refer to official company information. The final decision on the merger will be finalized and announced in mid-February.