A tie-up with Honda could help Nissan solve a big problem, car dealers said: It doesn't have any hybrids. A merger could fix that.

Honda has focused more on hybrids and unlike Nissan offers the models in the United States, where demand for the cars has surged

Speed limits are usually intended to prevent drivers from going too fast. Occasionally, though, they warn against bumbling along the road too slowly. Honda Motor boss Toshihiro Mibe and his Nissan Motor counterpart Makoto Uchida will need reminding of this if they don’t soon shift out of low gear for the tie-up they proposed on Monday.

Honda Motor Co. sketched plans for a drawn-out deal that amounts to an acquisition of Nissan Motor Co., as Japan’s automakers struggle to keep up in an increasingly competitive global car industry.

Japanese automakers Nissan Motor Corp. and Honda Motor Co. have confirmed that they are discussing closer collaboration but denied reports they have decided on a merger

Honda did not respond to Business Insider's request for comment. Honda CEO: Merger is not a Nissan rescue. Honda's shares had initially fallen when news first broke of the merger

Japanese auto makers Honda and Nissan said they plan to merge as traditional car makers try to cope with falling sales, slumping share prices, and increased competition from electric-vehicle makers. Honda and Nissan signed a memorandum of understanding to explore synergies and integrate their businesses through establishing a joint holding company,

Key Takeaways Moody's gave a positive review of the potential merger of Honda and Nissan.Analyst Dean Enjo wrote that the deal would be "credit positive" if done correctly.Former Nissan CEO Carlos Ghosn warned Nissan would face "carnage" if the combination went through.

Stocks wavered in morning trading on Wall Street Monday at the start of a holiday-shortened week. The S&P 500 fell 0.1%. A handful of technology companies helped cushion the widespread losses. The Dow Jones Industrial Average slipped 222 points,