Ghosn believes that Honda will be "in the driver's seat" and any cost cutting measures will heavily impact the much weaker Nissan

Honda and Nissan plan to merge as the two Japanese firms seek to fight back against competition from the Chinese car industry. The integration would create one of the world's biggest car producers alongside Toyota,

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.

Nissan will be the victim of cost-cutting “carnage” if it combines forces with Japanese peer Honda, former Nissan CEO Carlos Ghosn told CNBC on Tuesday.

SIGN UP for TheStreet’s FREE Daily newsletter 💰💸 While his tenure also brought about landmark products like the all-electric Nissan Leaf and the Nissan GT-R supercar; his tenure with the automaker,

Honda Motor, Nissan and Mitsubishi on Monday confirmed they are in talks regarding a possible merger at a time of auto industry upheaval. Honda stock tried to regain a key level on Tuesday after jumping on the merger news.

Analysts questioned the timing of the Honda-Nissan potential deal amid intense competition from Chinese rivals, reported the news agency Reuters.

A Honda Motor Co. and Nissan Motor Co. combination could give the two struggling Japanese brands the scale to take on China’s BYD Co., sales figures released Wednesday show. Honda, which earlier this week sketched out plans for a deal that amounts to an acquisition of Nissan,

Honda’s potential acquisition of Nissan could help the two Japanese brands improve their competitive stance against China’s BYD in the global car market. Struggling individually, Honda and Nissan sold 3.

Nissan’s sales have plunged in key markets across the globe in recent years. Last month, the company announced plans to cut 9,000 jobs and 20% of its global production capacity.