CNN
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Honda and Nissan are discussing a possible merger, potentially bringing together two Japanese automotive giants that have recently fallen on hard times.

The companies said in a statement that they were in discussions, but did not provide details or a time frame for when a deal, if one, might be completed. It is also unclear what the possible joint venture might look like. Nikkei first reported news of a possible merger on Tuesday.

“As announced in March, Honda and Nissan are exploring various opportunities for future collaboration, leveraging each other’s strengths,” the companies said in a statement on Tuesday. “If there are any updates, we will inform our stakeholders in due course.”

In March, Honda and Nissan announced they would collaborate on electric vehicles, and in August they announced they would collaborate on battery technology. But they could benefit from deepening their relationships, as both have faced challenges this year.

Both companies, like many non-Chinese automakers, have struggled in the once-promising Chinese market, the world’s largest auto market. Chinese consumers flocked to foreign brands but have largely switched to domestic brands that have higher value in the country. The Chinese government has also created incentives to accelerate customer adoption of electric vehicles and plug-in hybrids.

Although both companies offer electric vehicles and plug-ins – Nissan in particular was a pioneer of electric vehicle technology – Chinese brands like BYD have outdone their technology and are priced lower.

Nissan has also been struggling since its former CEO, Carlos Ghosn, fled Japan to his home country of Lebanon. Ghosn was arrested in Tokyo in 2018 on suspicion of financial misconduct and fired from Nissan. Ghosn has repeatedly denied the allegations.

His fall rocked the powerful automotive alliance between Nissan, Renault and Mitsubishi. Renault, once the world’s largest automaker partnership, has since sharply reduced its stake in Nissan, weakening the Japanese automaker.

Nissan said its operating profit fell 90% between March and September compared to the same period last year.

Meanwhile, Honda, which is about five times the size of Nissan, also faces challenges. The company announced plans to sell only zero-emission vehicles in major markets by 2040. However, the transition has been slow as relatively low gasoline prices, inadequate charging infrastructure and increasing competition have depressed demand for electric vehicles in the U.S. and Europe.

CNN’s Ramishah Maruf contributed to this report.