Honda and Nissan are reportedly in early discussions regarding a potential merger, which could reshape Japan’s automotive industry.
According to Bloomberg, the proposed union aims to strengthen their competitive position globally, particularly against Toyota, the world’s largest carmaker.
Shares in Nissan surged by 24%, marking a record intraday increase, while Honda shares fell by 3.4%.
Options being considered include a merger, a capital tie-up, or forming a holding company.
The companies have previously collaborated on electric vehicle batteries and software.
Analysts suggest the merger could bolster Nissan’s financial stability and enhance Honda’s scale to better compete in the electric vehicle market.
A formal announcement is expected by December 23, according to reports.