Honda and Nissan plan to merge as the two Japanese firms seek to fight back against competition from the Chinese car industry. The integration would create one of the world's biggest car producers alongside Toyota,

The most important market for both Honda and Nissan is North America. Their core car models are similar, as both companies focus on sports utility vehicles. Nissan does not sell hybrid vehicles (HVs) in North America, and the business integration may enable it to put its HVs into the North American market at an early date.

The merger talks between Honda and Nissan are the latest example of companies trying to respond to the competitive threat from China.