Japanese automakers Nissan and Honda have announced plans for a merger that would catapult them to a top position in an industry that's in flux as it transitions away from its reliance on fossil fuels.

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.

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.

Japan’s second- and third-largest automakers hope the $50 billion deal would help them catch up with Tesla and China’s BYD in electric vehicles and advanced software.

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

Japanese auto giants Honda and Nissan are in preliminary merger talks, according to media reports Wednesday, adding that a tie-up would aim to help them better compete against Tesla and Chinese electric vehicle makers.

A potential merger between Honda Motor and Nissan grabbed investor attention as Honda's stocks rose on Monday. Japanese automotive titans Honda and Nissan are working on a potential merger that would create the world's third-largest automaker as the global industry races to adapt to the electric vehicle (EV) revolution.