Once they find a common direction, Honda and Nissan will draw up a definitive agreement to merge, including a plan to transfer shares, by June 2025. If that goes through, they will seek to get plans approved by April 2026, with the merger happening later that year.

Honda and Nissan have strong presences in major markets like North America, Europe, and Japan. However, they are struggling in China. “Both Honda and Nissan have significant overcapacity issues in China, which requires optimization before any merger talks, James Hong, an analyst at Macquarie Securities Korea Ltd., said.

The Renault Group holds almost 36% of Nissan, but its role in the merger remains unclear. The French group said it’s considering “all options” as talks between the Japanese brands intensify. Former Nissan and Renault boss Carlos Ghosn suggests Renault might sell its shares to Honda.

Honda has worked with GM in a series of collaborations that did not involve any exchange of corporate equity. In 1993, GM controlled Isuzu and signed a deal to supply its Rodeo to become Honda’s first SUV,

With a 36-percent stake in Nissan, Renault appears open to a merger with Honda. But does it mean it wants to stay in the Alliance?

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

Here's a quick look at what a combined Honda and Nissan would mean for the companies, and for the auto industry.