Honda reports higher profits at the end of merger negotiations with Nissan

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Sales of cars recorded for motorcycle purchases for Honda are weaker as Japan’s second-largest automaker formally abandons $58 billion merger negotiations, its smaller rival Nissan aims to strengthen its competitiveness against China’s electric car champions.

Honda reported on Thursday that Chinese auto sales sales were nearly 40% in the first nine months of the year, despite its pre-tax profits rising 25% to 4.83 billion yen ($3.1 billion) in December’s quarter ended in the finals in December. Firm motorcycle sales.

Japanese automakers are also under pressure from another major market in the United States, with Donald Trump threatening to sign 25% tariffs on Mexico and Canada, with Honda and Nissan owning major production centers.

Shinji Aoyama, Honda vice president, said the company is rushing to export vehicles from both countries to the United States before the 30-day probation expires, but warned that if tariffs are issued, it would generate more than 20 billion days of profits for the full year. The influence of the meta. .

Earlier Thursday, Nissan and Honda held a board meeting to finalize the decision to end the negotiations and confirmed their move in a statement.

Honda held discussions with Japan’s third automaker in December to merge into the world’s fourth largest auto group, but negotiations were unveiled in less than two months, with Nissan’s proposal proposing a The proposal to make it a subsidiary of Honda.

Now, pay attention to how Nissan will survive the cash flow crisis. The company desperately needs support from external partners to stabilize its financial situation, while investors wait for more details in a comprehensive restructuring plan unveiled in November.

Nissan, which suffered from an outdated lineup and long infighting, reported its third-quarter results after reporting Honda on Thursday. Analysts expect that after the company bleed 60.6 billion yen in the first half of the year, profits will be reduced by 80% to 6 billion yen, with positive cash flow.

Honda’s expectations for net profit were 900 billion yen for the entire fiscal year ended March, while Nissan withdrew its guidance in November after initially expecting to earn 30 billion yen.

Executives involved in the negotiations said Honda was not impressed by Nissan’s Makoto Uchida’s turnaround plan, believing it wasn’t enough to stabilize the sick automaker.

As a result, Honda released a new proposal earlier this month that deviated from the original agreement to form a holding company. However, Nissan’s management can’t stand the risk of losing too much control over its brand and decisions, according to people familiar with the negotiations.

“The two companies concluded that prioritizing decision-making speed and execution management measures entering the era of electrification in an increasingly volatile market environment, it is best for stopping discussions to stop the discussion. of.”

The two companies said they will continue to work together on projects for electric vehicles and software, as announced in March and August last year, although blood may hinder it.

While Nissan needs partners, Honda demands a bigger scale to lay a solid foundation for its huge investment in electric vehicles, software and autonomous driving, analysts and government officials said.

Taiwan’s iPhone assembler Foxconn triggered Honda’s merger talks, which had ambitious ambitions to enter the EV manufacturing industry and made a way for Nissan’s strategic partner Renault.

Foxconn chairman Young Liu said Wednesday it was willing to buy shares at Nissan to achieve the goal of working with automakers to make orders to build electric cars for them, just like with Apple’s iPhone.

Renault, which owns 36% of Nissan, has been keen to sell its shares at the right price after overhauling its alliance arrangements in 2023.