Nissan Motor and Honda Motor are discussing a merger that could create the world’s No. 3 carmaker and leave Japan with just two auto-manufacturing groups.

A combination of some sort has been under consideration for some time as the companies work to stay competitive in the face of overcapacity and the need for huge investments related to electric-vehicle and self-driving technologies.

Discussions have become more urgent in recent months.

It has become clear that Nissan is in trouble and that something akin to a bailout is needed, rather than simply cooperation, joint production or any of the other similar measures considered for the companies to work together, short of merging.

At a news conference Monday, they announced that talks on the historic deal have commenced.

“To lead the mobility transformation, we’ve come to think that we need something bolder than just cooperation in some specific fields,” said Honda CEO Toshihiro Mibe. “We have reconfirmed that a merger would create synergies in all kinds of fields.”

Mitsubishi Motors, which is more than a third owned by Nissan, said it may join the talks and will decide by January. The three automakers aim to finalize the merger talks by June next year and establish a new holding company by the summer 2026.

Click here to read the full article on The Japan Times.

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Featured image: Nissan headquarters in Yokohama, Kanagawa Prefecture (Licensed under CC BY-SA 4.0)

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