The proposed deal aims to unify operations under a joint holding company, led by Honda, while maintaining the distinct identities of each brand, according to Honda's president, Toshihiro Mibe. If finalized, the merger would position the combined entity to better compete with market leaders Toyota and Volkswagen.

The merger talks come amid competition from China in the auto industry and the increasing popularity of electric vehicles.

Auto giants Honda and Nissan announced that they're going to begin talks about a merger, bringing the Japanese automakers under a single umbrella.