Japanese automakers Honda Motor and Nissan Motor are reportedly planning merger talks to strengthen their position in the evolving global automotive industry, according to the Nikkei newspaper. The two companies aim to operate under a holding company and may eventually integrate Mitsubishi Motors, where Nissan holds a 24% stake.

Honda confirmed in a statement that discussions on collaboration are ongoing but clarified the report did not originate from the company. “We are exploring various possibilities for future collaboration, leveraging each other’s strengths,” Honda stated, promising updates as appropriate.

stellantis
If completed, the deal would mark the largest automotive merger since Fiat Chrysler merged with PSA Groupe to form Stellantis in January 2021.

The report follows a strategic partnership formed in August between the two automakers to share software and automotive components. Industry experts have increasingly advocated for mergers to reduce costs and remain competitive against expanding Chinese automakers and U.S. EV leader Tesla.

Shares reflected investor optimism, with Honda’s U.S.-traded stock rising 2% and Nissan’s over-the-counter shares jumping more than 11% during midday trading Tuesday. Nissan did not immediately respond to requests for comment.