Speculation about a potential Honda and Nissan merger began earlier this month, and the two companies confirmed the official start of talks Monday.

Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

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