Honda reports decline in nine-month profit as talks with Nissan end

Japanese automaker Honda Motor Co. reported a 7% decline in profit for the nine-month period ending in December 2024, marking a significant setback for the company amid challenging global market conditions. The Tokyo-based company also announced the termination of discussions regarding a potential business integration with Nissan Motor Corp., though both companies will continue their collaboration on electric vehicles and smart car technology.

Honda’s net profit for April to December 2024 stood at 805 billion yen ($5 billion), a decrease from the 869.6 billion yen recorded in the same period the previous year. Despite this decline, the company’s overall sales saw an increase of nearly 9%, reaching 16.3 trillion yen ($106 billion).

While Honda’s motorcycle division remained a strong revenue driver, its automobile sales faced significant headwinds, particularly in China and Japan. The North American market, however, remained relatively stable, with demand for Honda vehicles showing resilience.

In December 2024, Honda, Nissan, and Mitsubishi Motors Corp. initiated discussions regarding the establishment of a joint holding company. The potential integration was seen as an effort to strengthen Japan’s automotive industry in the face of increasing competition from global players. However, on Thursday, Honda and Nissan confirmed that they were ending these talks, citing strategic differences.

Despite this, both companies reaffirmed their commitment to ongoing partnerships in key areas such as electric vehicle (EV) development and smart car technologies. These initiatives remain crucial as the global automotive industry undergoes rapid transformation toward electrification and autonomous driving solutions.

The termination of merger discussions raises questions about the future competitive landscape of Japan’s auto sector. As Honda and Nissan navigate evolving market dynamics, they will likely focus on individual growth strategies while leveraging existing collaborations to maintain a competitive edge.

With the increasing shift toward sustainable mobility, Honda has been accelerating its investment in electric vehicles and hybrid models. The company has outlined ambitious plans to expand its EV lineup and enhance battery technology, aiming to position itself as a leader in the global transition to green transportation.

Meanwhile, Nissan continues to advance its own EV strategy, striving to expand its footprint in both domestic and international markets. The end of the merger discussions may prompt both automakers to explore alternative alliances or strategic partnerships to drive innovation and profitability.

Honda’s recent financial report underscores the challenges facing the automotive industry as economic uncertainty, shifting consumer preferences, and regulatory changes reshape the global market. While the termination of talks with Nissan marks a strategic shift, both companies remain committed to innovation and collaboration in key technological areas. As they forge ahead, their ability to adapt to evolving industry trends will be critical in determining their long-term success.