Japanese automakers Nissan and Honda have announced plans for a merger that would catapult them to a top position in an industry that's in flux as it transitions away from its reliance on fossil fuels.

Japan's Honda and Nissan said Monday they had embarked on formal merger talks that would create the third-largest car manufacturer globally with sales of as much as $191.4 billion and more than $19 billion profit.

Japanese automakers Honda Motor Co. and Nissan Motor Corp. announced Monday their intention to merge by 2026 and create the world’s third-largest car-making operation by sales.