By Megumi Fujikawa and Yang Jie

TOKYO -- Honda and Nissan on Thursday officially scrapped their planned merger less than two months after announcing it, putting pressure on troubled Nissan to look for other partnerships.

The two Japanese automakers had said in December that they planned to combine operations by 2026, but talks quickly broke down.

Honda had initially agreed to a merger of equals but the two companies said Thursday that Honda later sought to make Nissan a subsidiary. That shift angered Nissan's board, a person familiar with the situation said.

The two companies said they would continue a collaboration on auto technology announced last August.

Nissan said in November it would cut 9,000 jobs and reduce global capacity by a fifth after facing troubles in its two biggest markets, the U.S. and China.

Analysts and people in the car industry said Nissan would likely seek out a new partner to help shore up its finances and collaborate on technology, and the partner could come from outside the auto industry.

Taiwanese electronics manufacturer Foxconn, best known for assembling iPhones and other Apple products, is one candidate. Young Liu, Foxconn's chairman, said Wednesday that he was open to collaborating with Nissan but doesn't intend to push for an acquisition.

Liu said that Foxconn has been in discussions with Renault, Nissan's longstanding French partner, regarding potential cooperation. Under a 2023 agreement, Renault is gradually reducing its stake in Nissan to around 15%. After the most recent share sale last September, Renault held just over 17% of Nissan directly and an additional 18.7% through a French trust.

Liu said Foxconn was discussing the possibility of buying Renault's stake in Nissan if it proved essential to forming a partnership.

Foxconn has been expanding into the electric-vehicle market in recent years. It hopes to use its manufacturing experience to produce EVs on behalf of established brands, much as it assembles electronics for brands such as Apple and Sony. Liu said he hoped to get business from Japanese automakers and named Nissan as one potential partner.

As technology advances, "it could well be the case that big tech companies and electronic components manufacturers -- such as Foxconn -- become crucial partners in automotive M&A," said Lucinda Guthrie, head of analytics firm Mergermarket. Still, she questioned whether anyone would want to take on the challenge of helping Nissan out of its troubles.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com and Yang Jie at jie.yang@wsj.com

(END) Dow Jones Newswires

February 13, 2025 02:01 ET (07:01 GMT)

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