(Reuters) -Japanese auto giants Honda (NYSE:) Motor and Nissan (OTC:) Motor will begin negotiations to merge as they face rising competitors from greater world electrical automobile makers, the newspaper reported on Tuesday.
The 2 firms have elevated ties in latest months as they face heavy competitors from Chinese language EV makers that has added stress on legacy manufacturers struggling to make sufficient revenue from their EV ventures.
Honda and Nissan weren’t instantly accessible for Reuters requests for remark. Reuters has not independently verified the Nikkei report.
Nissan and Honda, Japan’s third and second greatest automakers after Toyota (NYSE:), have been shedding market share in China. That nation accounted for nearly 70% of worldwide EV gross sales in November, with greater than 1.27 million in purchases for the month.
The 2 had mixed world gross sales of seven.4 million automobiles in 2023, however are grappling with challenges from EV makers, notably in China, the place BYD (SZ:) and others have surged forward.
Honda and Nissan in March agreed to cooperate of their EV companies, and in August deepened their ties, agreeing to work collectively on batteries, e-axles and different know-how.
The automakers want to function underneath a single holding firm and are anticipated to quickly signal a memorandum of understanding for the brand new merged entity, the Nikkei reported.
Honda and Nissan are additionally wanting to usher in Mitsubishi Motors (OTC:), by which Nissan is the highest shareholder with a 24% stake, underneath the holding firm, to create one of many world’s largest auto teams, the report stated.
The stakes of the 2 firms within the new entity, together with different particulars are to be determined later, Nikkei stated.
Any deal might be the largest within the business for the reason that $52 billion merger between Fiat (BIT:) Chrysler and PSA in 2021 to create Stellantis (NYSE:), one of many world’s largest auto teams with manufacturers resembling Jeep, Dodge, Maserati, Peugeot (OTC:) and Citroen.
