Together, Honda and Nissan would also pose more of a threat to Toyota Motor Corp., which is the world’s biggest automaker followed by Volkswagen AG.

Honda and Nissan plan to merge as the two Japanese firms seek to fight back against competition from the Chinese car industry. The integration would create one of the world's biggest car producers alongside Toyota, Volkswagen, General Motors and Ford.

The two major Japanese automakers are discussing a merger. Here is what to know, from the reasons why they are doing this to how it could impact you.

Talks about a possible merger of Nissan and Honda is the latest reaction as the global auto industry races to electrify prompted by China competition.

A Honda Motor Co. and Nissan Motor Co. combination could give the two struggling Japanese brands the scale to take on China’s BYD Co., sales figures released Wednesday show.

The most important market for both Honda and Nissan is North America. Their core car models are similar, as both companies focus on sports utility vehicles. Nissan does not sell hybrid vehicles (HVs) in North America, and the business integration may enable it to put its HVs into the North American market at an early date.

A prerequisite for the merger is for Nissan to complete its business turnaround, Mibe added. Honda and Nissan are the second and third largest automakers in Japan, respectively. I

Honda and Nissan plan to merge as the two Japanese firms seek to fight back against competition from the Chinese car industry. Joining forces would create one of the world's biggest car producers alongside Toyota,

Analysts questioned the timing of the Honda-Nissan potential deal amid intense competition from Chinese rivals, reported the news agency Reuters.

Honda and Nissan plan to team up to jointly challenge the world's top electric vehicle manufacturers like Tesla, and BYD.