Honda Motors and Nissan Motor are reportedly in the process of merging their companies and are set to begin negotiations soon, according to Japanese media.

The news, first reported by the Nikkei newspaper on Tuesday, comes as the two auto giants struggle to compete with the biggest global electric vehicle (EV) makers, including Tesla and Chinese automaker BYD.

The merger plan has not been confirmed by either company. On Tuesday, both companies issued similar statements regarding the report.

"As announced in March this year, Honda and Nissan are exploring various possibilities for future cooperation, leveraging each other's strengths," the company said in a separate statement.

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Nissan and Honda are reportedly in talks to merge their companies. (Getty Images/Getty Images)

Honda and Nissan are the second and third largest car manufacturers in Japan, respectively, with Toyota ahead of both.

The respective market capitalizations of Honda and Nissan are approximately 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion).

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Honda and Nissan are the second and third largest car manufacturers in Japan, respectively, with Toyota leading both. (Kyodo via Reuters Connect / Reuters Photos)

In November, Nissan cut it global workforce of 9,000 in a set of mass layoffs, reducing its global production capacity by 20%.

At the time, the company explained that it was "facing a dire situation" and presented plans to achieve "healthy growth." Those goals include reducing fixed costs by 300 billion yen (about $1.9 billion) and variable costs by 100 billion yen (about $649 million).

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The respective market capitalizations of Honda and Nissan are approximately 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion). (Ty Wright/Bloomberg via Getty Images/Getty Images)

"The company perform various steps to lower selling, general and administrative expenses, reduce cost of goods sold, rationalize its asset portfolio, and prioritize capital expenditures and investments in research and development," Nissan said in a statement at the time.

Reuters and FOX Business' Elizabeth Pritchett contributed to this report.