BERLIN (Reuters), – Thyssenkrupp and Japan’s NSK may form an automobile joint venture. The German conglomerate announced this on Thursday as it explores new ownership models in order to be more efficient in its core business areas.

Thyssenkrupp and NSK signed a Memorandum of Understanding (MoU), to look into a tie up between Thyssenkrupp Automotive Technology division & NSK’s Steering business. Thyssenkrupp added that their goal was to find a way to form a joint automobile business.

Martina Merz, chief executive of the Automotive Business said that “size and economies are critical factors to achieving success on global market,” in a statement.

NSK Steering and our automotive sector could collaborate to strengthen this position.

They have reached an agreement to conduct a phase-by-phase nonbinding assessments of their respective businesses. The companies hope to then make a final decision about a potential cooperation model before the end of this year.

Thyssenkrupp Automotive Technology was responsible for one-third of last year’s adjusted operating profits and 13% of its sales, which is 4.5 billion euro ($4.7 billion).

($1 = 0.9518 euros)