Japan’s Honda and Nissan to begin merger talks: report [Video]

Japanese auto giants Honda Motor and Nissan Motor will enter talks on a merger aimed at helping them compete against Tesla and other electric vehicle makers, newspaper Nikkei reported early Wednesday.

The two firms are looking to operate under a single holding company and will soon sign a memorandum of understanding for the new entity, according to the Tokyo-based Nikkei.

It reported that Honda and Nissan will consider bringing in Mitsubishi Motors, of which Nissan is the top shareholder, under the holding company to create one of the world’s largest auto groups.

Honda and Nissan — Japan’s number two and three automakers after rival Toyota — deepened ties in March when they agreed to explore a strategic partnership on electric vehicles.

Analysts said …