Nissan CEO Makoto Uchida met with Honda CEO Toshihiro Mibe on Thursday to express his desire to terminate their merger discussions, following a proposal from Honda to make Nissan a subsidiary, according to a source familiar with the situation.

“A consensus was reached (on Nissan’s side) that the talks cannot proceed under that proposal,” said the source with knowledge of the discussions, declining to be identified.

However, the discussions have faced challenges due to increasing disagreements, with sources informing news agency Reuters that they stalled after Honda proposed making Nissan a subsidiary.

However, Bloomberg also reported that Nissan is seeking a new partner as it prepares to end negotiations to form a joint holding company with Honda.

Nissan plans to officially withdraw from the memorandum of understanding at a board meeting scheduled before its third-quarter earnings announcement next week.

According to Japanese public broadcaster NHK, Honda’s position is that it will not accept any integration unless Nissan agrees to become a subsidiary.

Honda and Nissan were in talks to merge by 2026, they said on December 24, 2024, historic pivot for Japan’s auto industry that underlined the threat Chinese EV makers pose to the world’s long-dominant legacy car makers.

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