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

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.

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.

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