The Detroit Three are facing an auto industry increasingly affected by the rise of China as demonstrated by the planned merger of Honda and Nissan.

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.

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 ...