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

When asked how the upcoming merger with Nissan and Mistubishi will impact collaborations with GM, a Honda executive said they'll "remain unaffected."

A merger between Honda and Nissan appears to be almost certain, but the former brand's CEO has been tight-lipped on the benefits of the deal.

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.

Nissan and Honda agreed to consider a merger and set up a joint holding company, which would create the world's third-largest automaker.

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

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.

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

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.

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.