Honda's CEO said it was "difficult" to explain why Nissan would make a good business partner. Analysts believe that Honda's ideal partner for a merger would be a more "healthy and financially sound company.

Honda Motor Co. and Nissan Motor Co. plan to merge under a holding company with the top executives chosen by Honda in a historical reshuffling of Japan’s auto industry meant to keep the country’s second- and third-largest players competitive amid a global onslaught of new competitors and technologies.

Japanese automakers Honda and Nissan have announced plans to work toward a merger that would form the world's third-largest automaker by sales, as the industry undergoes dramatic changes in its transition away from fossil fuels.