A proposed $58 billion merger to create the world’s fourth-largest carmaker appears on the verge of collapse after Honda made an unexpected proposal to turn Nissan into a fully owned subsidiary, according to three people familiar with the matter.

Negotiations between Nissan and Honda are reportedly shaky after the two Japanese automakers previously announced they would merge by 2026.

There's strife of the horizon as Nissan vehemently opposes Honda's suggestion of making the struggling carmaker its subsidiary.