New York: Honda and Nissan are in formal talks for a potential merger, aiming to become the world’s third-largest automaker, alongside Mitsubishi, Nissan’s alliance partner. These discussions, set to last six months, could position the combined entity behind only Toyota and Volkswagen in global sales.

The merger comes amid rising competition from Chinese automakers and pressures to transition to electric vehicles (EVs). Nissan's recent financial struggles, including a 94% profit drop in 2024 and looming debt in 2026, highlight the urgency of this collaboration. Honda, too, seeks to share EV development costs to stay competitive.

Industry experts see this move as transformative but cautious, citing past challenges in automaker mergers like Daimler-Chrysler and Nissan-Renault. If successful, the Honda-Nissan partnership could reshape the global auto industry.