Honda, Nissan merger expected

Honda and Nissan are in talks to deepen ties, two officials said on Wednesday, including a possible merger, the clearest sign yet of how Japan’s once seemingly unbeatable auto industry is being reshaped by challenges from Tesla and Chinese rivals. A combined Honda and Nissan would create a $54 billion company with annual output of 7.4 million vehicles, making it the world’s third-largest auto group by vehicle sales after Toyota and Volkswagen.

The two firms already forged a strategic partnership in March to cooperate in electric vehicle development, but Nissan’s deepening financial trouble in recent months has added more urgency for closer cooperation with larger rival Honda.