The pair has not made any details public, but it was widely reported in Japanese media that they would sign a memorandum of understanding on Monday afternoon.
Honda and Nissan were poised to announce the start of merger talks to help the Japanese giants catch up with their Chinese rivals and Tesla in the electric vehicle field.
Their collaboration will create the world's third-largest automaker, which will expand the development of electric vehicles and self-driving technologies while coming to the aid of struggling Nissan.
The pair has not publicly disclosed any details, but it was widely reported in Japanese media that they would sign a memorandum of understanding on Monday afternoon.
Honda and Nissan - Japan's second- and third-largest automakers after Toyota - are aiming to finalize the merger deal in June 2025, according to several media reports.
Mitsubishi Motors, which may join the new holding company early next year, is also expected to take part in Monday's announcement after Honda and Nissan hold board meetings.
This morning, the presidents of Honda, Nissan and Mitsubishi Motors told the ministries of industry and transportation of their plan to begin negotiations, Kyodo News reported.
Honda and Nissan's partnership could include a production tie-up where they would produce vehicles at each other's plants, Kyodo said, citing sources close to the matter.
Weak consumer spending and intense competition in several markets are making life difficult for many automakers.
Business is especially tough for foreign brands in China, where electric vehicle makers such as BYD are leading the way as demand for less-polluting vehicles grows.
Last year, China overtook Japan as the biggest exporter of vehicles, helped by government support for electric vehicles.
"We hope that Japanese companies will take steps in response to these changes and take measures to survive and win in the face of international competition," senior government spokesman Yoshimasa Hayashi said on Monday.
He declined to comment on the merger reports, but stressed "the importance of strengthening competitiveness in areas such as ... batteries and software in automobiles."
Debt-ridden Nissan announced thousands of job cuts last month as it reported a 93% drop in first-half net profit, making the merger with Honda a welcome one. | BGNES
Honda and Nissan enter merger talks
