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.

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

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.