Honda and Nissan are reportedly in discussions about a potential merger between the Japanese automakers, and the rumors do not come as a surprise to industry experts.

Top Japanese carmakers Nissan Motor and Honda Motor are understood to be exploring a blockbuster merger, as the two rival companies seek to stay competitive on the road to full electrification. It is thought the prospective tie-up could create the world's third-largest auto group by vehicle sales,

Nissan also said the two Japanese carmakers were exploring possible collaboration. A merger could create a giant able to challenge global auto manufacturers.