Japanese automaker Nissan (NSANY) finds itself at a crossroads. Nissan was poised to participate in a megamerger with rival Honda (HMC), and it was a huge development when the talks were revealed late last year.

Nissan backed out of negotiations with Honda in a deal that would have created the third largest automaker in the world, the report said.

Nissan Motor Co. is seeking a new partner as it prepares to end negotiations to form a joint holding company with Honda Motor Co., people familiar with the matter said.