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(Reuters) -French automaker Renault, Nissan Motor's largest shareholder, is open in principle to the Japanese automaker pursuing merger talks with peer Honda Motor, two people familiar with the matter said.
The sources, who declined to be identified because it is confidential, said the carmaker would examine all the implications of a tie-up to ensure its own interests are protected. Bloomberg first reported Renault's position.
Japanese auto giants Honda and Nissan are in talks to set up a holding company, according to a person with knowledge of the matter, a move that could help them share more resources to face tough competition.
"On principle, Renault Group supports Nissan's efforts to restore business situation," a spokesperson for the French automaker said on Wednesday, but declined to comment on the current merger talks.
The talks, first reported by the Nikkei newspaper, would allow Honda and Nissan to cooperate more closely on technology and better compete in the electric vehicle race.
(Reporting by Shivansh Tiwary in Bengaluru and Gilles Guillaime and Mathieu Rosemain in Paris; Editing by Shilpi Majumdar, Arun Koyyur and Louise Heavens)