Honda and Nissan have formally agreed to hold talks over the next six months on a possible merger, a deal that would create the world’s third-largest automaker and give them more resources to compete with a growing threat from Chinese carmakers.

 

A third, smaller Japanese automaker, Mitsubishi, which is already in an alliance with Nissan, will also participate in the talks. The combined company, should it be created, would trail only Toyota (TM) and Volkswagen in global sales.

 

Mergers in the auto industry are nothing new. They have taken place since the acquisition of various brands formed General Motors (GM) in the first decade of the 20th century. But they sometimes have trouble succeeding bringing together different partners.