Honda and Nissan set sights on merger for electric vehicle competition, Nikkei reports

Investing.com -- Honda (NYSE:HMC ) Motor and Nissan (OTC:NSANY ) Motor are set to engage in discussions regarding a potential merger, aiming to pool resources to strengthen their position in the electric vehicle market, according to Nikkei on Wednesday.

The two Japanese automakers are contemplating the possibility of operating under a shared holding company, the report said, adding that a memorandum of understanding, which will formally initiate these negotiations, is expected to be signed shortly.

Details regarding their respective stakes in the newly proposed entity, along with other specifics, will be determined at a later stage, the report said.

This move signifies a strategic response to the fast-paced evolution of the automobile industry, particularly the electric vehicle segment.

By joining forces, Honda and Nissan aim to better compete with Tesla (NASDAQ:TSLA ) and Chinese electric vehicle producers, who currently hold a significant market share.

The decision to merge resources comes as automakers worldwide are grappling with the shift towards electric and autonomous vehicles, a trend that has been accelerated by growing environmental concerns and advancements in technology.

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Source: Investing.com