The plan announced Monday by Japanese automakers Honda and Nissan to merge by 2026 highlights how the rise of Chinese automakers such as BYD is pressuring the industry to look for potential cost savings and increased scale,

Nissan and Honda agreed to consider a merger and set up a joint holding company, which would create the world's third-largest automaker.

Japanese automakers Honda and Nissan have announced plans to join forces, forming world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.