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 shares plunged on Wednesday as reports said the struggling Japanese carmaker was walking away from merger talks with rival Honda . The Nikkei business daily and other local media earlier said Honda had proposed making Nissan its subsidiary,