Together, Honda and Nissan would also pose more of a threat to Toyota Motor Corp., which is the world’s biggest automaker followed by Volkswagen AG.

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, Volkswagen, General Motors and Ford.

Japanese carmakers Honda and Nissan are reportedly considering a merger — a sign that major global manufacturers are joining forces to compete against their mighty Chinese competitors as the auto world goes electric.