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While Nvidia CEO Jensen Huang made major waves at this year’s CES, it was the auto industry that stole the show.

Honda and Nissan expect big benefits from their potential merger to create the world's third-largest auto group but intense competition from China raises questions about whether they can make it work in time. While the outcome is not certain and will depend partly on troubled Nissan making progress in its turnaround, they aim to finalise the deal by August 2026. Nissan's junior partner, Mitsubishi Motors, will decide by next month whether it plans to take part.

(Bloomberg) -- The proposed business integration of Honda Motor Co. and Nissan Motor Co. is positive overall for the credit quality of the two Japanese automakers, but it carries risks especially for Honda, according to Moody’s Ratings.Most Read from BloombergHo Chi Minh City Opens First Metro Line After Years of DelayThe Architects Who Built MiamiReviving a Little-Known Modernist Landmark in BuffaloNew York’s Congestion Pricing Plan Still Faces Legal HurdlesNew York City’s Historic Preservation

The Japanese companies are considering joining forces to survive in a rapidly changing auto industry, but auto history is filled with troubled and failed marriages.

The major averages posted modest gains on Monday to begin the holiday-shortened trading week.

The firms want to strengthen their offerings in the face of Chinese competition in the electric vehicle sector.

Japanese automakers Nissan and Honda agreed to consider a merger and set up a joint holding company, a move that would create the third-largest automaker in the world.

Japanese automakers Honda and Nissan have announced plans to work toward a merger, forming the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels. The two companies said they had signed a memorandum of understanding on Monday and that smaller Nissan alliance member Mitsubishi Motors also had agreed to join the talks on integrating their businesses. Honda's president, Toshihiro Mibe, said Honda and Nissan will pursue unifying their operations under a joint holding company.

Japan’s second- and third-largest automakers hope the deal can help them catch up with Tesla and China’s BYD in electric vehicles and advanced software.

Honda and Nissan are reportedly in discussions about a potential merger between the Japanese automakers, and the rumors do not come as a surprise to industry experts.

The merger talks between Japan’s second- and third-largest automakers highlight the intense upheaval within the world’s auto industry.

In March, the two Japanese car makers agreed to explore a strategic partnership for electric vehicles.

The new tariffs announced by Prime Minister Justin Trudeau will match levies imposed by President Biden and could further strain relations between Canada and China.