Honda Motor Co. and Nissan Motor Co. will begin negotiations on a possible merger as soon as Dec. 23, according to Japan’s Nikkei news service, bringing the two Japanese automakers a step closer together.

If Mitsubishi Motors joins Nissan and Honda, the merger could result in a behemoth worth of about $55 billion based on the market capitalization of all three automakers.

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.