Even if the merger is off, Nissan remains keen on working with Honda in areas such as electric vehicles and software defined vehicles.

Two of Japan’s largest automakers have been in talks to combine their operations to form one of the world’s biggest car groups.

Nissan and Honda, both major automakers based in Japan, responded Wednesday to reports that a potential merger of the two companies could beat risk of being abandoned.

TOKYO — Nissan is set to call off merger talks with rival Honda, a source said Wednesday, abandoning a $60 billion-plus tie-up that would have created the world's No. 3 automaker and raising questions about how it will drive a turnaround by itself.

The pair are discussing various options, including the possibility of withdrawing from deal talks, according to statements.

A proposed $58 billion merger to create the world’s fourth-largest carmaker appears on the verge of collapse after Honda made an unexpected proposal to turn Nissan into a fully owned subsidiary, according to three people familiar with the matter.

Negotiations between Nissan and Honda are reportedly shaky after the two Japanese automakers previously announced they would merge by 2026.

The Nissan CEO has reportedly notified the Honda CEO about his decision to end merger talks. The $60 billion Honda and Nissan merger would create the world’s third-biggest automaker. Nissan is now looking for new partners,