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.

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.

Currently, Honda is an independent OEM, albeit one with strong links to General Motors. Meanwhile, Nissan currently forms one part of an alliance, together with France's Renault and the also-Japanese Mitsubishi. But the Renault-Nissan alliance has not been entirely smooth.

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