Recently, automotive companies Nissan and Honda were reported to be in talks to merge their operations, including the possibility of establishing a joint holding company with Mitsubishi Motors, according to Bloomberg.
The combination is expected to record global sales of 4 million vehicles in the first six months of this year, but the figure is still below Toyota's record of 5.2 million units sold in the same period.
In terms of market value, Honda is at ¥6.8 trillion ($44.4 billion), far exceeding Nissan's ¥1.3 trillion ($8.5 billion).
In the US market, Nissan shares were reported to have risen 12%, while Honda shares fell 0.9%.
The move is aimed at increasing competitiveness against Tesla and Chinese electric vehicle manufacturers.
It also has the potential to reshape the landscape of the Japanese automotive industry into two major groups: Toyota, which already works with Subaru, Suzuki, and Mazda, and the Honda-Nissan-Mitsubishi alliance.
This combination could not only save Nissan from the financial pressure faced by the company, but also give the Japanese automotive company the strength to challenge Toyota's dominant position globally.
