TOKYO (Kyodo) -- Honda Motor Co. and Nissan Motor Co. have informed the Japanese government of their plan to start talks on a merger, a government official said Monday, in what would create the world's third-largest automaker group to take on U.S. and Chinese rivals in the electric vehicle market.

The two companies are set to hold a press conference later in the day. A source familiar with the matter said they aim to conclude the negotiations in June.

Sources said earlier that Honda and Nissan, Japan's second- and third-largest automakers by volume, respectively, will operate under a holding company with Mitsubishi Motors Corp., a Nissan partner, considering joining them later.

Honda and Nissan will look to split hefty development costs and reduce spending on production by sharing components.

EVs are one of the most critical segments for growth as electrification reshapes the global auto industry. But Honda, Nissan and other Japanese automakers have lagged behind competitors such as Tesla Inc. of the United States and China's BYD Co.

Honda and Nissan agreed in March to launch a feasibility study on a strategic EV production partnership, including related software technology development, to cut costs and improve competitiveness.

The Honda-Nissan alliance would be the latest in a series of tie-ups among major automakers, with the group's annual sales reaching around 8 million vehicles if those of Mitsubishi Motors are included.