Japan’s Kyodo News Agency said on Saturday that Honda and Nissan are considering producing cars at each other’s factories as part of their plan to deepen relations and possible merger.
The report said that Honda would consider supplying hybrid cars to Nissan as part of the plan, without mentioning the source of the information.
The merger of Honda, Japan’s second-largest car company, and Nissan, Japan’s third-largest, would create the world’s third-largest car group in terms of car sales, behind Toyota and Volkswagen, producing 7.4 million cars annually.
The two companies established a strategic partnership in March to cooperate in developing electric cars, but Nissan has faced financial and strategic problems in recent months.
As Honda announced, “Nissan and Mitsubishi Motors are in the process of combining our strengths and exploring potential forms of cooperation, but nothing has been decided yet,” a Honda spokesperson said, when asked about the report.
Nissan declined to comment, saying that the details of the report were not based on the company’s announcement. Nissan is the largest shareholder in Mitsubishi Motors
Kyodo said Honda could use Nissan’s factory in Britain, as it now only has engine and motorcycle factories in Europe.
The report stated that this move comes amid concerns about how the policies of President-elect Donald Trump may lead to change in manufacturing with his promises of protectionist trade policies.