Honda's CEO said it was "difficult" to explain why Nissan would make a good business partner. Analysts believe that Honda's ideal partner for a merger would be a more "healthy and financially sound company.

Hon Hai Precision Industry Co., the Taiwan-based manufacturer of iPhones known as Foxconn, is putting its interest in pursuing Nissan Motor Co. on hold while the Japanese automaker is in negotiations for a potential merger with Honda Motor Co.

Foxconn's decision comes after it sent a delegation to meet with Nissan's biggest shareholder Renault in France, the report said. Nissan and Foxconn did not immediately respond to Reuters' requests for comment.