Honda, Nissan engage in historic merger talks

Honda and Nissan have started talks towards a potential merger, a historic pivot for Japan's auto industry that underlines the threat Chinese EV makers now pose to some of the world's long-dominant legacy car makers. The Japanese giants are in talks to merge by 2026, they said on Monday. The tie-up would create the world's third-largest auto group by vehicle sales after Toyota and Volkswagen. It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD. The merger of Honda, Japan's second-largest automaker, with Nissan, its No 3, would be the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a $52 billion deal. Smaller Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining and would make a decision by the end of January, the companies said.