Nissan (NSANY.US) has initiated a plan to halt production and lay off workers in order to meet the conditions for a merger with Honda (HMC.US).

As Honda Motor Co., Ltd. Sponsored ADR (HMC.US) is preparing to integrate struggling Nissan Motor (NSANY.US) into its business, the latter is accelerating adjustments to its business structure to meet the terms of the agreement. It is reported that Nissan Motor will stop production of its AD compact van in November to reduce excess production capacity. A Nissan spokesperson stated that the manufacturing department Nissan Shatai Co. has not made any decisions regarding layoffs, and denied an earlier report that hundreds of jobs would be lost once production of this small van ceased. It is understood that Nissan Shatai's Shonan plant in Kanagawa Prefecture produced 150,000 vehicles in the 2023 fiscal year, including approximately 7,000 AD compact vans. The NV200 compact van is also produced at the same plant. Nissan holds a 50% stake in Nissan Shatai. Currently, Nissan has announced layoffs of thousands of employees and plans to reduce production capacity by one-fifth to reverse a 94% decline in net profit. Facing bankruptcy, Nissan sought assistance from Honda last year, although the latter has made it clear that Nissan's recovery is a prerequisite for any form of cooperation between the two car manufacturers. According to reports on Tuesday, Nissan announced at the end of last year 9,000 job cuts, with approximately 6,700 employees from the production department. The report stated that by this fall, about 1,000 employees in Thailand will be reassigned or laid off, and about 6% of the North American department employees have applied for voluntary retirement. A Nissan spokesperson declined to comment on this report. Analysts suggest that the historic deal between Nissan and Honda effectively divides the Japanese car manufacturers into two major groups, subjecting Nissan's business to closer scrutiny. Last week, there were reports that Honda had inquired whether Nissan could acquire a portion of Renault's 35.7% stake to prevent foreign influence during negotiations. Honda and Nissan are expected to announce a negotiation framework later this month, with plans to list an independent holding company in August 2026.