Japan’s Nissan, Honda announce plans to merge

(From left) Makoto Uchida, president and CEO of Nissan motor corporation; Toshihiro Mibe, president and representative executive officer of Honda, and Takao Kato, president and CEO of Mitsubishi Motors at the joint press conference in Tokyo. Pic/AFP

Japanese automakers Honda and Nissan have announced plans to join forces, forming the world's third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

The two companies signed a memorandum of understanding on Monday and said Nissan alliance member Mitsubishi Motors also had agreed to join the talks on integrating their businesses. Automakers in Japan have lagged behind their big rivals in electric vehicles and are trying to cut costs and make up for lost time.

News of a possible merger surfaced earlier this month, with reports saying that the talks on closer collaboration partly were driven by aspirations of Taiwan iPhone maker Foxconn to tie up with Nissan, which has an alliance with Renault SA of France and Mitsubishi.

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