Does Honda need a partner?

A Barron's report this weekend suggests that the number three Japanese automaker may find it tougher to compete without a joint venture partner.

With Toyota's purchase of Fuji Heavy Industries, Subaru's parent company, expected to significantly strengthen Toyota's lead position in the fast-growing hybrid vehicle market, the financial publication suggests that Honda would be well-advised to look for a partner.

Barron's believes that more mergers and joint ventures are inevitable as the global auto industry struggles to deal with overcapacity and rapidly shifting market demand.