Honda’s CEO struggles to explain why the merger is happening, analysts remain skeptical, and Foxconn waits in the wings.

Japanese automakers Honda and Nissan will attempt to merge and create the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.

Actual details of the merger are thin, but the announcement by the brand makes clear that Honda would lead the new holding company under which the automakers would exist, with the automaker choosing the top executives.

The proposed deal aims to unify operations under a joint holding company, led by Honda, while maintaining the distinct identities of each brand, according to Honda's president, Toshihiro Mibe. If finalized, the merger would position the combined entity to better compete with market leaders Toyota and Volkswagen.

The potential merger could help boost the auto companies production of electric vehicles amid growing changes in the car industry.

Honda and Nissan said they had signed a memorandum of understanding and that Mitsubishi also had agreed to join the talks.

"It's not a pragmatic deal because frankly, the synergies between the two companies are difficult to find," Ghosn told Bloomberg.

This merger could create the world’s third-largest automaker, with combined resources to dominate the EV market. Honda and Nissan hope to outpace rising Chinese brands like BYD and Nio.

TWO days before Christmas, a triple car-company press conference was held for the global audience. Honda, Nissan, and — on the side — Mitsubishi went online to announce a move that was somewhat shocking but not entirely surprising.

BENGALURU: Honda and Nissan expect big benefits from their potential merger to create the world’s third-largest auto group but intense competition in the segment raises questions about whether they can make it work in time.