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Honda, Nissan and Mitsubishi Drop Talks on Business Integration

This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)
This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)
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Honda, Nissan and Mitsubishi Drop Talks on Business Integration

This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)
This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)

Japanese automakers Honda, Nissan and Mitsubishi said Thursday they are ending talks on business integration.
Nissan Chief Executive Makoto Uchida said the talks had changed focus from setting up a joint holding company to making Nissan into a subsidiary of Honda, The Associated Press reported.
“The intent was to join forces to win in the global competition, but this was not going to realize Nissan's potential, so I could not accept it,” he told reporters. He said that Nissan was going to aim for a turnaround without Honda instead.
Honda Chief Executive Toshihiro Mibe said in a separate news conference that Honda had suggested a stock swap to speed up decision-making.
“I am really disappointed,” Mibe told reporters. “I felt the potential was great, but I also knew actions that would bring pain were necessary to realize that."
The automakers agreed to end their agreement regarding the consideration of the structure for a collaboration, a joint statement said.
Honda Motor Co. and Nissan Motor Corp. announced in December that they were going to hold talks to set up a joint holding company. Mitsubishi Motors Corp. had said it was considering joining that group.
From the start, the effort had analysts puzzled as to the advantages to any of the companies, as their model lineups and strengths overlap in an industry shaken by the arrival of powerful newcomers like Tesla and BYD, as well as the move to electrification.
Honda and Nissan initially said they were trying to finalize an agreement by June and set up the holding company by August.
The three automakers will continue to work together on electric vehicles and smart cars, such as autonomous driving, they said Thursday.
In recent weeks, Japanese media had various reports about the talks breaking down, citing unidentified sources. Some said Nissan balked at becoming a minor player in the partnership with Honda.
Mibe denied he knew or heard anything about the media speculation that Taiwan's Foxconn was considering taking a stake in Nissan.
Honda is in far better financial shape and was to take the lead in the joint executive team. Honda reported Thursday that its April-December 2024 profits declined 7% to 805 billion yen ($5 billion).
Nissan reported a loss for the July-September quarter as its vehicle sales sank, prompting it to slash 9,000 jobs. At that time, Uchida took a 50% pay cut to take responsibility for the results.

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Turkish Lira Touches Record Low, Stocks and Bonds Slide After Istanbul Mayor Detained 

24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)
24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)
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Turkish Lira Touches Record Low, Stocks and Bonds Slide After Istanbul Mayor Detained 

24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)
24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)

Türkiye's lira fell as much as 12.7% and touched a new all-time low of 42 to the dollar on Wednesday, with bonds and stocks also tumbling sharply, after authorities detained President Recep Tayyip Erdogan's main political rival.

The move against Ekrem Imamoglu, the mayor of Istanbul, was called "a coup attempt" by the opposition and appears to cap an aggressive months-long legal crackdown on opposition figures across the country which has been condemned as a politicized attempt to silence dissent.

Imamoglu was expected to be named as the main opposition's presidential candidate within days.

The lira traded at 38.90 to the dollar at 1016 GMT, from a close of 36.67 on Tuesday, having recouped some of the losses from the all-time low it hit earlier - but still having had its biggest decline since July 2023. The earlier tumble to 42 marked one of the lira's largest absolute intraday moves on record.

Türkiye's international government bonds also came under pressure with longer-dated maturities suffering the sharpest falls. The 2045 maturity fell 1.6 cents to be bid at 85.117 cents, its lowest level since

"In Türkiye this morning, bonds and FX are coming under pressure after a potential presidential candidate, the mayor of Istanbul, was arrested," said Frantisek Taborsky, EMEA FX & fixed income strategist at ING.

"(Türkiye's lira) is the most heavily positioned carry-trade in the emerging markets space at the moment in our view, and a sharp move could potentially lead to further outflows. On the other hand, we should see local banks providing some FX support."

MONETARY POLICY

Finance Minister Mehmet Simsek said they were doing everything necessary to ensure healthy functioning of the markets, without giving further details.

Bankers calculate that the Turkish central bank sold a minimum of $5 billion in FX after lira's crash, while some say it may have already reached $10 billion for the day.

Analysts and investors were also concerned about the knock on effect for monetary policy, worrying that the sharp decline in the lira could delay or halt the rate-cutting cycle since the central bank has been ensuring real appreciation of the currency for months.

The central bank had in December embarked on an easing cycle for the first time after an 18-month tightening effort that reversed years of unorthodox economic policies and easy money championed by Erdogan, which had seen the economy run red hot and inflation exceeding 70%. Erdogan has supported the steps by the central bank for a more orthodox policy.

"With this FX shock they need to keep rates where they are for now," one banker said.

Stocks also crashed, reflecting investor worries over rule of law. Turkish blue-chip stocks fell by nearly 6%, set for their worst daily performance since late 2023.

The banking sub-index declined 9.67%. Borsa Istanbul said trading was halted temporarily after the main BIST 100 index fell 6.87% in early trading and the market-wide circuit breaker was triggered.

"A wave of selling was triggered after Imamoglu's diploma was annulled and he was detained. There have been foreign investor inflows in recent days ... but political uncertainty currently prevails and concerns about foreign investors leaving the country have increased," Serhat Baskurt, algorithmic operations manager at ALB Yatırım, said.

Baskurt said he expected the decline on the stock exchange to continue over the coming days.

Borsa Istanbul said that the uptick rule on short sale transactions for the BIST 50 index would be used on Wednesday. The rule requires short sales to be conducted at a higher price than the previous trade.