TOKYO (Reuters) -Honda and Nissan (OTC:) are considering producing vehicles at each other’s factories as part of their plan to deepen ties and possibly merge, Japan’s Kyodo news agency said on Saturday.
Honda (NYSE:) will consider supplying hybrid vehicles to Nissan as part of the plan, the report said, without citing the source of the information.
A merger of Honda, Japan’s second-largest auto company, and Nissan, Japan’s third-largest, would create the world’s third-largest auto group by vehicle sales, after Toyota (NYSE:) and Volkswagen (ETR:), good for 7.4 million vehicles per year.
The two automakers forged a strategic partnership in March to collaborate on electric vehicle development, but Nissan has faced financial and strategic problems in recent months.
As announced by Honda, “Nissan and Mitsubishi Motors (OTC:) are in the process of joining forces and exploring possible forms of cooperation, but nothing has been decided yet,” a Honda spokesperson said when asked about the report .
Nissan declined to comment, saying the details of the report were not based on a company announcement. Nissan is the largest shareholder of Mitsubishi Motors.
Kyodo said Honda could use Nissan’s car plant in Britain because it now only has engine and motorcycle plants in Europe.
The move comes amid concerns about how newly elected President Donald Trump’s policies could shake up the manufacturing sector with his promises of protectionist trade policies, the report said.
