Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

Japan’s second- and third-largest automakers hope the $50 billion deal would help them catch up with Tesla and China’s BYD in electric vehicles and advanced software.

The proposed deal aims to unify operations under a joint holding company, led by Honda, while maintaining the distinct identities of each brand, according to Honda's president, Toshihiro Mibe. If finalized, the merger would position the combined entity to better compete with market leaders Toyota and Volkswagen.

Japanese automakers Nissan and Honda have announced plans for a merger that would catapult them to a top position in an industry that's in flux as it transitions away from its reliance on fossil fuels.

The Japanese companies are considering joining forces to survive in a rapidly changing auto industry, but auto history is filled with troubled and failed marriages.

Honda and Nissan have officially confirmed the rumors that they're pursuing a merger. Both would still operate under their brands but with a new joint holding company as parent. If Nissan-controlled Mitsubishi also came on board,

Honda did not respond to Business Insider's request for comment. Honda CEO: Merger is not a Nissan rescue. Honda's shares had initially fallen when news first broke of the merger

TOKYO >> Honda and Nissan are in talks to merge by 2026, they said on Monday, a historic pivot for Japan’s auto industry that underlines the threat Chinese EV makers now pose to the world’s long-dominant legacy car makers.

Japanese automakers Honda and Nissan have announced plans to work toward a merger that would form the world's third-largest automaker by sales, as the industry undergoes dramatic changes in its transition away from fossil fuels.

Honda, Nissan, and Mitsubishi have announced plans to merge, aiming to create the world’s third-largest automaker. The announcement came during a joint press conference where the companies revealed their vision for the future.