Honda, Nissan set to announce launch of integration talks, media reports say

TOKYO (Reuters) – Honda (NYSE:) and Nissan (OTC:) are expected on Monday to announce the start of business integration talks, according to Japanese media reports, as the automakers look to survive a rapidly changing industry landscape.

The two automakers will likely host board meetings on Monday about the talks and later hold a joint press conference, where Nissan’s alliance partner Mitsubishi Motors (OTC:) is also expected to attend, the reports said.

A merger of the three Japanese brands would create the world’s No. 3 auto group by vehicle sales after Toyota (NYSE:) and Volkswagen (ETR:), in what would be the biggest industry-reshaping deal since the 2021 formation of Stellantis (NYSE:).

Honda and Nissan have been exploring ways to bolster their partnership, including setting up a joint holding company, as they face growing challenges from Tesla (NASDAQ:) and Chinese rivals, Reuters reported last week. Nissan last month announced a plan to cut 9,000 jobs and 20% of its global production capacity after its sales plunged in its key China and U.S. markets.

Forms of collaboration being discussed also include Honda’s supply of hybrid vehicles to Nissan and the joint use of Nissan’s car assembly factory in Britain, Kyodo News reported on Saturday.

French automaker Renault (EPA:), Nissan’s largest shareholder, is open in principle to a deal and would examine all the implications of a tie-up, sources have said.

Taiwanese manufacturer Foxconn (SS:) had approached Nissan about a potential bid but paused its interest after it sent a delegation to meet with Renault in France, Bloomberg News reported on Friday.