Japanese car makers Honda and Nissan are reportedly in talks about deepening their ties to cope with increasing competition. According to a report by Nikkei Asia, the two automotive giants are considering joint car production and a possible merger.
Honda and Nissan previously struck a deal to join forces in efforts to develop electric vehicles as a way to be competitive on the market dominated by Tesla and Chinese EV producers. However, now the companies are considering taking their partnership to a next level.
Under the proposed strategic partnership deal, Honda and Nissan would use each other’s factories to produce vehicles. As part of the agreement, Honda would supply Nissan with hybrid vehicles while also potentially using Nissan’s car factory in Sunderland, England. Honda currently only produces motors and engines in its factories in Europe.
The move would likely bring the merger between Japan’s second and third-largest car producers one step closer to completion. The merger would create the world’s third-biggest automotive company, with roughly 7.5 million cars sold annually. This would only trail Toyota and Volkswagen’s numbers.
Mitsubishi could also join the new group, considering that Nissan is the company’s top stakeholder.