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.

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.

The potential merger could help boost the auto companies production of electric vehicles amid growing changes in the car industry.

TOKYO (AP) — 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's acquisition of Nissan could strengthen the two struggling brands to better compete with China's BYD Co. in the global auto market. Honda's planned acquisition of Nissan would combine their more than 6 million global sales in 2024,

Analysts questioned the timing of the Honda-Nissan potential deal amid intense competition from Chinese rivals, reported the news agency Reuters.

Two major Japanese automakers are heading for a historic merger, as Honda Motor Co. and Nissan Motor Co. signed a basic agreement to start full-fledged talks on integrating their businesses Monday. With the rise of electric vehicles manufactured by U.