DETROIT — Japanese automakers Motor Nissan and Honda Motors Reportedly planning to enter merger negotiations to better compete in the rapidly changing global auto industry, the Nikkei newspaper reported Tuesday.

Honda and Nissan are considering operating under a holding company, and will soon sign a memorandum of understanding, according to the report. They also seek to eventually bring Mitsubishi Motors, in which Nissan is the largest shareholder with a 24% stake, under the holding company..

The combined Nissan-Honda-Mitsubishi enterprise would be equivalent to more than 8 million vehicle sales per year, according to Nikkei. This places the company among the world's largest automakers, but still below its Japanese automakers Toyota Motorin 11.2 million in 2023, as well as a German car maker Volkswagenwhich last year reported sales of 9.2 million vehicles.

In similar statements, Honda and Nissan neither confirmed nor denied the report: "The reported content has not been released by our company," Honda said. "As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other's strengths. We will inform our stakeholders of any updates in due course."

The merger report follows the two Japanese automakers entering into a strategic partnership earlier this year on shared automotive components and software.

Such a tie-up would be the largest auto industry merger since Fiat Chrysler merged with France-based PSA Groupe to form Stellar in January 2021.

Car consultants and other experts have recently been asking for increase in mergers and acquisitions to share costs and better compete against rapidly expanding Chinese automakers as well as the US all-electric vehicle leader Tesla.

Honda shares traded in the United States closed up about 1% on Tuesday. Over-the-counter Nissan shareswhich is in the middle of a restructuring, jumped more than 11%.