Honda and Nissan Gear Up for Strategic Alliance and Potential Merger

Honda and Nissan are in discussions about a potential merger that could see the two automakers using each other's factories and collaborating on hybrid vehicle production. This move aims to deepen their strategic partnership, which began in March this year, amid Nissan's financial challenges.

Honda and Nissan, two giants of Japan's automotive industry, are reportedly considering a collaboration that involves producing vehicles in one another's factories, according to a report by Kyodo News on Saturday. While sources were not cited, this development marks a significant shift in the two companies' relationship.

The potential partnership would see Honda possibly supplying hybrid vehicles to Nissan, as both companies explore establishing a deeper alliance through a holding company. Unnamed insiders have suggested that a merger is on the table, which could result in the creation of the world's third-largest auto group by vehicle sales, following Toyota and Volkswagen, with an estimated annual production of 7.4 million vehicles.

Since March, the automakers have been working closely on electric vehicle development. However, Nissan has been dealing with financial and strategic difficulties, further highlighting the potential benefits of this strengthened partnership for both parties involved.

(With inputs from agencies.)