NEW YORK: Japanese government officials had suggested that Nissan Motor Co. and Honda Motor Co. start merger talks, the Financial Times reported in its online edition on Sunday.

The suggestion, however, was immediately rejected by both automakers and the merger idea was buried amid the chaos caused by the novel coronavirus, the British newspaper said.

The proposal was first made to the companies at the “tail-end of 2019,” the newspaper quoted sources as saying, noting that it reflects “growing concern in Tokyo over the future of the country’s once mighty car sector.”

“The idea of combining Nissan with Honda appears to have arisen from the protectionist instincts of advisers to Prime Minister Shinzo Abe,” the paper said.

People familiar with the situation said the advisers feared that Nissan’s alliance with French partner Renault SA had soured badly since the 2018 arrest of their former boss Carlos Ghosn and that Honda has not formed a capital alliance with any other industry player, according to the newspaper.

Nissan, Honda and the prime minister’s office declined to comment for the daily.

JIJI Press