Honda and Nissan are in talks to deepen ties, two people said on Wednesday, including a possible merger, the clearest sign yet of how Japan's once-seemingly unbeatable auto industry is being reshaped by challenges from Tesla and Chinese rivals. A combined Honda and Nissan would create a $54 billion company with an annual output of 7.4 million vehicles, making it the world's third-largest auto group by vehicle sales after Toyota and Volkswagen.
The two firms already forged a strategic partnership in March to cooperate in electric vehicle development, but Nissan's deepening financial and strategic trouble in recent months has added more urgency for closer cooperation with larger rival Honda. Nissan announced a $2.6 billion cost savings plan last month that include
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