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.

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.

Honda and Nissan have announced official plans to merge.The agreement seeks to consolidate a wide range of resources from platform sharing to supply chain systems in order to bolster the position of Japanese automakers in a rapidly evolving automotive market dominated by electrification and ongoing industry consolidation.