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.

Speculation about a potential Honda and Nissan merger began earlier this month, and the two companies confirmed the official start of talks over a business integration during a news conference on Monday. Under current proposals, a holding company would ...