Huge car brand ‘eyeing return to the UK’ three years after leaving as it plots ‘merger’ with ‘on the brink’ rival firm

A HUGE car brand could be returning to the UK as it plots a "merger" with its rival company.

Honda is expected to make a return to the UK in a dramatic new move after closing its manufacturing plant in 2021.

The car manufacturer is eyeing up a partnership with its rival Nissan, which could mean using each other's plants to build vehicles.

A merger could create a car manufacturing group big enough to compete with the likes of Tesla, reports .

The paper added this could do wonders for the UK car industry, which saw production fall by almost a third in November - the lowest level for the month since 1980.

But, there are still a number of obstacles that could block this partnership.

Nissan owns a stake in Mitsubishi, as part of a three-way alliance.

The company also has a complicated relationship with Renault, whereby both firms own a share of each other.

Honda, the Japanese car manufacturer, first gained popularity in the UK with its motorcycles.

In 1980 it joined forces with British Leyland, a British car-making company.

It gradually became a powerhouse in the UK car manufacturing industry, with 3,400 employees at its plant in Swindon, which it bought in 1985.

Honda doesn't have any car production operations in Europe, just engine and motorcycle plants.

Nissan's primary European plant is in Sunderland, where it announced last year it would be investing £2 billion. The Qashqai, Juke and Leaf models are built here.

Despite the hefty investment, however, the plant is producing cars at a rate that is below capacity.

A senior UK industry figure told The Times: "There is certainly capacity there for Honda."

A spokesman for Nissan said: “As announced in March and August of this year, Nissan, Honda, and MMC [Mitsubishi Materials Corporation] are considering various possibilities for future collaboration including the content of the report,

"But no decisions have been made. If there are any updates, we will inform all stakeholders at the appropriate time.”

Honda did not respond to a request for comment.

The move comes after Nissan is said to be "on the brink of collapse" with warnings from bosses that it may only have a year of survival left in its current form.

To stay afloat, Nissan may need support from Japan or the US Government after Renault is looking to withdraw its funding, two "senior officials" from the Japanese carmaker told the last month.

One of the officials said: "We have 12 or 14 months to survive.

"This is going to be tough.

"And in the end, we need Japan and the US to be generating cash."

Nissan has already cut 9,000 jobs across its global operation, while its CEO Makoto Uchida took a 50% pay cut in an economy drive.

But, as it reportedly enters talks with Honda, the amalgamation of the famous Japanese car makers could create a new "automatic powerhouse".

If the alleged plans are successful, the company could sell more than seven million vehicles a year.