Ford and General Motors, two of the largest car companies in the history of the world, are said to be in discussion over a possible merger. The Automotive News, a trade paper in the US, claims that talks on the merger began in July.

Ford have been in and out of the spotlight in recent weeks following their planned decision to lay off some 30,000 workers or more in the United States. General Motors, the owner of Vauxhall in the UK, has also started to aggressively cut jobs .

GM are said to have been in discussion with Nissan of Japan and Renault of France, and industry experts have speculated that Bill Ford Jr. (the chief executive of Ford who may soon be superseded) has approached both companies also.

GM and Ford shares soared at the news. GM said: We routinely discuss issues of mutual interest with other auto-makers. We do not comment publicly on those private discussions, which in many cases never lead anywhere. Ford corresponded, saying: We do not comment on speculation.