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.

Honda and Nissan said they had signed a memorandum of understanding and that Mitsubishi also had agreed to join the talks.