Honda and Nissan Reportedly in Merger Talks

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Japanese automakers Honda and Nissan are exploring the possibility of a merger to strengthen their position in the competitive automotive market.

Nissan and Honda plan to enter into negotiations for a merger to better compete in the rapidly changing global automotive industry, the Nikkei newspaper reported on Tuesday. Honda and Nissan are considering operating under a holding company, and soon will sign a memorandum of understanding, according to the report. They also look to eventually bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company.

'The reported content was not released by our company,' Honda said in an emailed statement.'As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other's strengths. We will inform our stakeholders of any updates at an appropriate time.' The merger report follows the two Japanese automakers entering into a strategic partnership in August on shared automotive components and software. Such a tie-up would be the largest automotive industry merger since Fiat Chrysler joined with France-based PSA Groupe to form Stellantis. Automotive consultants and other experts have recently been calling for an increase in mergers and acquisitions to share costs and better compete against rapidly expanding Chinese automakers as well as U.S. all-electric vehicle leader Tesla. Nissan was not immediately available for CNBC's request for comment

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