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,

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.