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Nissan and Honda start merger talks to take on Tesla and create the world's 3rd largest car company

The companies hope a merger could help them take on Tesla and Chinese EV producers amid an increasingly difficult environment for legacy automakers.

The two automakers have agreed to proceed with discussions to build a "strategic partnership focused on intelligence and electrification," according to a statement issued on Monday. It would be the largest domestic merger in Japanese automotive history, and if finalized, it would create the world's third-largest automaker by sales. Profits were down in the latest earnings reports for all three of Japan's top auto companies — Toyota, Nissan, and Honda — with slumping sales in China a constant theme.

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