Honda, Nissan and Mitsubishi have confirmed talks are taking place to potentially create the world’s third-largest carmaker.
The trio on Monday firmed up plans to “start consideration towards a business integration through the establishment of a joint holding company”.
Reports earlier in the day had pointed towards talks between Japan’s second and third-largest carmakers, Honda and Nissan.
Monday’s confirmation said the duo had signed a memorandum of understanding, with Mitsubishi set to decide on joining by late January.
If set up, the merged business would be the third-largest carmaker globally by sales behind Toyota Motor (NYSE:TM) Corp and Volkswagen Group (XETRA:VOW).
It would boast a market capitalisation of around US$50 billion (£39.77 billion) and be formed as the global car industry moves towards electrification in its largest-ever shift.
Japanese manufacturers have struggled to keep up with the likes of Chinese rivals in moving to electric vehicles.
Honda president Toshihiro Mibe on Monday said the merged group would initially be led by his firm’s management, with August 2026 being targeted for completion.
There were “points that need to be studied and discussed" about the merger,” he added.
“Frankly speaking, the possibility of this not being implemented is not zero.”
Honda shares climbed by 3.8% on Monday, as Nissan and Mitsubishi moved 1.6% and 0.6% higher respectively.