Honda and Nissan announced Thursday they were terminating negotiations for a mega-merger that would have created the world's third-largest car company.

Nissan plans to cut thousands of jobs and slash production in a turnaround plan that becomes more important after calling off its Honda tie-up.

Merger talks between Honda and Nissan have collapsed after the firms failed to agree on a multi-billion-dollar tie-up. The Japanese carmakers, along with junior partner Mitsubishi, had aimed to combine their businesses to fight back against competition from rival firms, especially in China.