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.

Nissan is still holding “various discussions” with Honda, the carmaker said Wednesday in response to media reports that it is set to scrap merger talks with its larger rival. The two Japanese companies announced in December that they would conduct negotiations over the following six months on a possible merger,

A combination of Honda and Nissan, which would have created the world’s third-largest auto maker, looks to be off the table. Nissan’s board determined that Honda’s terms for a combination of the two auto makers were unacceptable,