Nissan Motor Co., Honda Motor Co., and Mitsubishi Motors Corp. have agreed to terminate their memorandum of understanding (MOU) to consider a tripartite collaboration.

Nissan and Honda signed the memorandum in December “to start discussions and considerations toward a business integration” between the two companies via the establishment of a joint holding company.

The week before, news outlets reported the companies were discussing a merger. However, according to the Associated Press, the companies confirmed they were considering closer collaboration and denied a future merger.

According to Nissan and Honda, an MOU signed last March 15 was meant to establish a strategic partnership “to further accelerate their efforts toward achieving a carbon-neutral society and a zero-traffic-fatality society.” Then, on Aug. 1, the companies signed another MOU “to deepen the framework of the strategic partnership” and announced they would jointly research fundamental platform technologies for next-generation software-defined vehicles (SDVs). The focus was to be on the areas crucial for intelligence and electrification.

Mitsubishi, a Nissan alliance member, signed a separate MOU with Nissan and Honda to explore its possible “participation, involvement, and synergy sharing” as part of the joint holding company.

“Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles,” a Thursday press release from Honda states. “This framework was established with the MOU signed on August 1 last year, striving to create new value and maximize the corporate value of each company.”

A press release from Nissan states that since signing the MOU, its management team and Honda’s, including the CEOs as well as stakeholders, have discussed and considered the market environment, business integration objectives, management strategies, and post-integration structures post-integration. Honda issued the same release.

“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,” the release states.

“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.”

The companies plan to collaborate going forward within 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.”

Nissan also announced on Thursday that it will implement financial “comprehensive turnaround measures.”

“Nissan Motor Co. is implementing immediate measures to turn around its performance and create a leaner, more resilient business capable of swiftly adapting to changes in the market,” a press release states.

Makoto Uchida, Nissan president and CEO, added, “Nissan is fully committed to its turnaround actions, aiming to reduce costs by around 400 billion yen [$2.6 billion]. We are dedicated to achieving a more efficient cost structure while driving top-line growth through enhanced competitive products that cater to the diverse needs of our customers. We are executing our turnaround—centered on efficiency and growth— with pace and purpose.”

The OEM said the reduction of fixed and variable costs will result in an automotive business break-even point for fiscal year 2026 of 2.5 million vehicles rather than 3.1 million, enabling a “stable” operating margin of 4%.

Savings of 200 billion yen in fixed costs are expected from selling, general, and administrative expenses (SG&A), about 100 billion yen from restructuring the manufacturing base, and around 30 billion yen from development efficiencies, according to the release.

Images

Featured image: da-kuk/iStock