Nissan said Wednesday that the two carmakers had been “exploring various possibilities for future collaboration” for months. Honda chief executive Toshihiro Mibe said his company is considering a merger or joint ventures with Nissan that could put them in a better position to take on competitors.

Top Japanese carmakers Nissan Motor and Honda Motor are understood to be exploring a blockbuster merger, sending shock waves through the global automotive industry as the two rival companies seek to stay competitive on the road to full electrification.

Nissan and Honda are reportedly engaged in a merger talks. The two companies have sold more than 1.7 million vehicles in the US so far this year.