Honda and Nissan are reportedly looking the possibility of mergingsparking speculation about what the potential move could mean, but insiders say the rumors of a partnership aren’t a surprise.

The news of the merger talks, which was first reported by the Nikkei newspaper on Tuesday, comes as the two Japanese auto giants struggle to compete with the world’s biggest electric vehicle (EV) makers. including Tesla and Chinese automaker BYD.

Nissan and Honda are reportedly in discussions for a possible merger. (Getty Images/Getty Images)

While neither Honda nor Nissan have confirmed merger discussions, Brian Moody, the executive editor of Autotrader and Kelley Blue Book, predicted about a year ago that there would be more such partnerships, because the companies can pool resources and bear costs.

Moody said FOX business in an interview that if a small brand says it’s going all-electric, that’s one thing, but for a big company to do that is a big undertaking that requires huge amounts of research and development.

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Honda and Nissan are Japan’s second and third largest automakers, respectively, with Toyota leading both.

Rumors of a possible merger between Honda and Nissan are not a surprise (YOSHIKAZU TSUNO/AFP via Getty Images/Getty Images)

The respective market capitalizations of Honda and Nissan are approximately 5.95 trillion yen ($38.8 billion) and 1.17 trillion yen ($7.6 billion).

“A company like Honda they might not be able to do it on their own, but at the same time, Honda has some pretty compelling products, so I think they both bring something important to the table,” Moody said.

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“But the most important thing is to pool resources so that (they) don’t make a bad business decision for a technology, electric cars, that is growing, but not growing as fast as people might have thought or expected,” he added .

According to Brian Moody, one possible outcome of a possible Honda-Nissan merger could be a less expensive electric vehicle option. (David Paul Morris/Bloomberg via Getty Images/Getty Images)

So what might a merger mean for the consumer? Moody says he could see value in smaller, less expensive electric cars coming from such a deal.

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“I could even see a merger or a partnership like this leading to a low-cost sub-brand,” he said. “Because that’s what we’re hearing, is that a lot of people, a lot of consumers, are saying, ‘You know, new cars are too expensive. I can’t buy a new car.'”

Andrea Margolis of FOX Business and Reuters contributed to this report.