Toyota is getting a big push from its Chinese rival after the automaker’s stock fell nearly 6% in the wake of a Chinese government announcement on Tuesday that it would merge with a carmaker it is in a competition with.
The announcement from the Chinese government on Tuesday was met with criticism from industry leaders who said it was the biggest blow to the auto industry since China opened its market to U.s. automakers in 1995.
The deal would mean Toyota and the Japanese automaker would be a majority-owned subsidiary of Toyota Motor Corp., the world’s largest auto company.
The move comes as the auto sector is undergoing a renaissance in China as more and more companies move to embrace the country’s growing middle class and embrace more local production.
The country is also looking to diversify its economy away from reliance on exports to the rest of the world.
While there’s some debate over how much of the U.K.’s decision to leave the European Union and exit the European Parliament is a sign of Chinese President Xi Jinping’s intentions, the move was a welcome one.
The agreement would give the Toyota and Chinese automakers more of a foothold in the U-S.
market and give them greater control over the terms of the deal, the companies said in a joint statement.
Toyota and Nissan have been rivals since the late 1990s, but their relationship has been strained in recent years as they compete against each other.
They were once both listed as “China’s two largest automakers,” but Nissan sold off its stake in Toyota to Citigroup in 2014.
The U.k. company then bought Toyota from Citigroup for $13.6 billion in 2015.
The U.KS. government said it would not be making a decision on whether to approve the deal until it is seen as an overall good for the U., but it will allow the two companies to work out details and determine the best path forward.
The deal could be finalized as early as the end of next month.
The two companies are looking to create a $6 billion car-manufacturing plant in Chattanooga, Tennessee, and a $5 billion facility in the state of Georgia.
Nissan and Toyota have been working together to develop technologies that would make vehicles more fuel-efficient and provide them with more options in terms of fuel-saving features.