According to media reports on Wednesday citing sources, Japan's two major auto giants, Nissan and Honda Motor, are considering canceling merger negotiations; influenced by reports of the end of the merger negotiations, the stock prices of Honda and Nissan both rose on Wednesday, but Nissan subsequently turned from rise to fall.
According to media reports on Wednesday citing sources, Japan's two major auto giants$Nissan Motor (7201.JP)$and $Honda Motor (HMC.US)$are considering canceling merger negotiations.
Sources said that the boards of directors of both companies will soon hold meetings to discuss the termination of the merger.
The report also stated that the negotiations did not develop as Honda had hoped. Honda had proposed making Nissan its subsidiary, but Nissan opposed this.
Due to reports of the end of merger negotiations, the stock prices of Honda and Nissan rose sharply on Wednesday, but Nissan later turned from gains to losses. As of the time of writing, Honda Motor's US stock rose nearly 7%, while Nissan's Japanese stock price once dropped over 5%, later being suspended by the Exchange.
Analyst Karl Brauer from the auto search engine and research company iSeeCars stated that the rise in stock prices for both companies reflects a decrease in short-term uncertainty for investors.
However, he pointed out that "the long-term development paths of both auto manufacturers remain uncertain, with several issues that each company needs to resolve."
In December of last year, Nissan and Honda officially announced the initiation of merger negotiations, which were scheduled to conclude in June of this year. However, according to informed sources, the growing differences between the two parties made the negotiations complicated.
Nissan's strategic partner Mitsubishi has also been invited to participate in the planned merger. Recently, media reports indicated that Mitsubishi Motors has officially decided not to join Honda and Nissan's merger plan, choosing instead to remain independent.
Currently, Honda and Nissan are the second and third largest auto manufacturers in Japan, respectively, after Toyota. A significant merger between Honda and Nissan was originally expected to create the third-largest auto manufacturer by global sales.
The potential end of the merger talks has raised new questions: Can the battered Nissan survive the recent crisis without external help?
Analysts have previously stated that Nissan's financial difficulties and changes in its alliance with Renault are both reasons driving the push for this merger plan.
Nissan revealed in its second-quarter performance report that it plans to lay off 9,000 employees and will cut its Global production capacity by 20%.
Driven by the wave of electric vehicles, the Global Autos Industry is undergoing profound changes that have a disruptive impact on traditional Auto Manufacturers.
Nissan faces severe challenges in its largest market, the USA, as well as in China and other Emerging Markets. Compared to the same period last year, the company's operating profit for the first half of fiscal 2024 fell by 90%, and Net income decreased by 94%.
In addition, Trump's tariffs may also impact Nissan. Nissan has several plants in Mexico. Analysts say that the impact of US tariffs on Mexico will be greater for Nissan than for Honda Motor or Toyota.
Editor/ping