Japanese automakers Honda and Nissan have announced plans to join forces, forming 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.

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.