Photo/Illutration Nissan Motor Co. and Honda Motor Co. (Asahi Shimbun file photos)

Honda Motor Co. and Nissan Motor Co., facing growing competition from electric vehicle makers, are finalizing plans to start management integration talks, a source said Dec. 18.

They will likely consider creating an umbrella holding company that would control the two automakers, rather than an outright merger.

Mitsubishi Motors Corp. could join the alliance, which would create a major automotive group with annual sales of more than 8 million vehicles.

If Honda and Nissan decide to negotiate, they are expected to discuss ownership shares of the envisaged holding company and other details.

“We are discussing all the possibilities,” Honda President Toshihiro Mibe said on Dec. 18, referring to Honda, Nissan and Mitsubishi. “We will make an announcement if something is decided.”

In a statement released the same day, Nissan also said the companies are studying various possibilities for future collaboration and will announce any updates at an appropriate time.

Honda and Nissan announced in March that they will collaborate on EVs by developing and jointly procuring common key components, such as batteries.

In August, the companies said Mitsubishi Motors will join the EV partnership. Nissan is Mitsubishi’s top shareholder.

Japanese automakers, which have been strong in gasoline vehicles and gas-electric hybrids, are struggling against up-and-coming EV producers, led by Tesla of the United States and BYD of China.

In China, where EVs are gaining market shares, both Honda and Nissan closed factories after their vehicle sales fell sharply. Honda also pared its payroll there.

Nissan has also been performing poorly in the United States. The company’s product lineup does not include any hybrid vehicles, which are popular in the country.

The company announced it will shed 9,000 jobs and cut back on production capacity by 20 percent after profits fell 90 percent from a year earlier in the six months through September.

At a news conference on Dec. 18, Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on issues related to the individual companies’ management.

“We expect that Japanese companies will respond to changes (in their industries) and make efforts to survive international competition,” he said.

(This article was written by Akihiro Nishiyama and Daisuke Matsuoka.)

Related News