Nissan and Honda plan to begin merger talks as competition for electric vehicles increases

Honda Motors Their companies and Nissan Motor are said to be in the process of merging their companies and are set to begin negotiations soon, according to Japanese media.

The news, first reported by the Nikkei on Tuesday, comes as the two auto giants struggle to compete with the world’s biggest electric car makers, including Tesla and Chinese automaker BYD.

Merger plans have not been confirmed by either company. On Tuesday, the two companies issued identical statements ignoring the reports.

“As announced in March of this year, Honda and Nissan are exploring various possibilities for future cooperation, leveraging each other’s strengths,” the two companies said in separate statements.

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Honda and Nissan are the second and third largest automobile manufacturers in Japan, respectively, led by Toyota.

The market capitalization of Honda and Nissan is approximately 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion).

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In November, Nissan reduced production Global workforce increased by 9,000 In a series of mass layoffs, reducing its global production capacity by 20%.

The company explained at the time that it was “facing a difficult situation” and had developed a plan to achieve “healthy growth.” The goals included reducing fixed costs by 300 billion yen (about $1.9 billion) and variable costs by 100 billion yen (about $649 million).

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“The company is Implementing various measures “To reduce selling, general and administrative expenses, reduce cost of goods sold, rationalize its asset portfolio, and prioritize capital expenditures and investments in research and development,” Nissan said in a statement at the time.

Elizabeth Pritchett of Reuters and Fox Business contributed to this report.