Two titans may merge: Honda and Nissan forge unexpected global alliance

Honda and Nissan have started talks about joining together. Both are major Japanese car companies that are facing business challenges. The news first came from Nikkei, a Japanese news outlet. The two companies confirmed they are talking, but didn't say what kind of partnership they might form or when they might make a deal. Both companies are being careful not to share many details yet. This could be a big change for Japan's car industry, if it happens.

CNN was the only news source that got direct confirmation about Mitsubishi being part of these talks. While Honda and Nissan confirmed this to CNN, Mitsubishi hasn't said anything when asked for comments.

This isn't the first time Honda and Nissan have worked together. In March, they agreed to work on electric cars together. Then, in August, they decided to share their knowledge about car batteries. Both Honda and Nissan have had a tough year in business, which might be why they want to work more closely together.

Foreign car makers, including Honda and Nissan, are struggling in China, which is the world's biggest car market. CNN confirmed that Chinese buyers who once preferred foreign brands now choose local brands, seeing them as better value. The Chinese government helps buyers choose electric and hybrid cars through incentives. Although Nissan was an early leader in electric car technology and both companies make electric vehicles, Chinese companies like BYD now have better technology and cheaper prices. This has pushed Honda and Nissan to lose their strong position in China's car market.

According to CNN’s story about the biggest alliance in the world, Nissan faced major problems after its CEO Carlos Ghosn fled to Lebanon. He was arrested in Tokyo in 2018 for suspected financial wrongdoing and Nissan fired him. Ghosn says he's innocent. This caused big problems for Nissan's partnership with Renault and Mitsubishi, which was once the world's biggest car alliance. Renault has since sold many of its Nissan shares, making Nissan weaker. The company's troubles show in its recent financial results--Nissan's operating income dropped 90 percent between March and September compared to last year.

Honda, despite being five times bigger than Nissan, has its own problems. As reported by CNN, the company wants to sell only zero-emission vehicles in its main markets by 2040. However, this plan isn't working well. Three main issues are slowing down electric car sales for Honda in the U.S. and Europe: gas prices are low (making regular cars more attractive), there aren't enough charging stations, and there's more competition in the electric car market.