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.

Hon Hai Precision Industry Co., the Taiwan-based manufacturer of iPhones known as Foxconn, is putting its interest in pursuing Nissan Motor Co. on hold while the Japanese automaker is in negotiations for a potential merger with Honda Motor Co.

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.