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

There's strife of the horizon as Nissan vehemently opposes Honda's suggestion of making the struggling carmaker its subsidiary.

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.

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.

Nissan CEO Makoto Uchida met with Honda counterpart Toshihiro Mibe on Thursday to say he wanted to end their merger talks after the larger automaker proposed making Nissan a subsidiary, said a source with knowledge of the matter.