(Reuters) – Honda Motor will resume talks with Nissan Motor to form the world’s fourth-biggest automaker provided Nissan CEO Makoto Uchida steps down, the Financial Times reported on Tuesday citing a person familiar with discussions.
Japan’s second- and third-largest automakers by sales after Toyota Motor had been in talks to create a $60 billion firm after a lack of hybrid models in the U.S. and competition from local rivals in China had sent Nissan’s earnings diving.
Those talks collapsed last week, plunging Nissan into further uncertainty and highlighting the pressure on legacy automakers, particularly from emerging Chinese giants disrupting the industry.
Nissan declined to comment to Reuters on the FT report. Honda said the report was not something it had announced.
Uchida has been under pressure to turn Nissan around after years of faltering sales and management turmoil left the company a diminished force. Reuters reported in December that subsequent months would be critical for Uchida and Nissan’s future.
Merger talks with Honda unravelled in a little more than a month due to Nissan’s pride and insufficient alarm about its predicament, as well as Honda’s proposal to make its smaller peer a subsidiary, sources previously told Reuters.
The FT reported that Honda is willing to revive negotiations with a Nissan boss who can more effectively manage internal opposition. Honda CEO Toshihiro Mibe last week said his company had no plan to launch a hostile takeover bid for Nissan.
Nissan has been working on a turnaround programme under which it plans to reduce its workforce by 9,000 people and global manufacturing capacity by 20%. It said on Thursday it would provide an update on the programme within a month.
Uchida has expressed his intention to stay until 2026, but is facing pressure to step down in coming months from board members and French partner Renault following the failure of negotiations with Honda, the FT reported.
Nissan’s board of directors has also started informal discussions regarding the timing of Uchida’s departure, the FT reported.
Reporting by Daniel Leussink in Tokyo and Rhea Rose Abraham in Bengaluru and Urvi Dugar; Editing by Sherry Jacob-Phillips and Christopher Cushing
