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 deal that would have created the world’s third-largest automaker and given them more resources to compete with a growing threat from Chinese carmakers.

Japan’s Kyodo News agency and Nikkei newspaper have reported that Nissan is set to ditch those talks.

In a statement on its website, Nissan noted media coverage “stating that our company has withdrawn the basic agreement for the merger with Honda” but said that “this matter has not been announced by our company.”

Vehicles move along the assembly line as Honda announces plans to build electric vehicles and their parts in Ontario with financial support from the Canadian and provincial governments, at their automotive assembly plant in Alliston, Ontario, Canada, April 25, 2024.

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“Based on the memorandum of understanding signed on December 23 last year, Honda and our company are in the stage of advancing various discussions … and we plan to establish a direction and make an announcement around mid-February,” Nissan added.

Nissan has not responded to a CNN request for comment. CNN has also reached out to Honda.

Honda recently sounded out Nissan about becoming its subsidiary, Kyodo News said Wednesday, citing sources familiar with the matter. But the proposal met with “vehement opposition” within Nissan, the sources noted.

Nissan’s restructuring plan has failed to convince Honda that the struggling carmaker is on track to turn around its fortunes, a key condition for the planned merger, according to the sources.

A third, smaller Japanese automaker, Mitsubishi, which is already in an alliance with Nissan, was also due to participate in the merger talks. The combined company, if created, would have trailed only Toyota (TM) and Volkswagen in global sales.

Nissan has struggled since the collapse of its alliance with Renault and faced severe financial problems that put it in desperate need of a larger merger partner.

Juliana Liu in Hong Kong contributed reporting. This is a developing story and will be updated.