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,

Honda CEO Toshihiro Mibe has said the companies need to build up capabilities by 2030 or face being 'beaten,' but analysts question whether they have that much time.