BERLIN (Reuters) – Thyssenkrupp and Japan’s NSK are considering forming an automotive joint venture, the German conglomerate said on Thursday, as it continues to explore new ownership models for its key business areas to become leaner.

The two companies signed a memorandum of understanding (MoU) to explore a tie-up between Thyssenkrupp’s Automotive Technology division and NSK’s steering business, Thyssenkrupp said, adding the goal was to develop an approach for a joint automotive business.

“In the automotive business in particular, size and economies of scale are key factors for achieving success in global markets,” Chief Executive Martina Merz said in a statement.

“A collaboration between our automotive segment and NSK Steering could help us to further strengthen and expand this position.”

The two companies have agreed on a phase of non-binding assessment of the relevant businesses, and aim to make a decision on a possible cooperation model by the end of the year.

Thyssenkrupp Automotive Technology accounted for a third of the company’s adjusted operating profit last year and 13%, or 4.5 billion euros ($4.7 billion), of sales.

($1 = 0.9518 euros)

(Reporting by Kirsti Knolle and Christoph Steitz; Editing by Maria Sheahan)