CEO Makoto Uchida could very well fall on his sword—whether or not Nissan’s board is still interested in a tie-up with its larger domestic rival. Japanese carmaker Honda Motor is reportedly demanding Nissan jettison CEO Makoto Uchida as a condition for reopening acquisition talks that could create the world’s third-largest carmaker by vehicle sales.

Honda Motor will resume talks with Nissan Motor to form the world's fourth-biggest automaker provided Nissan CEO Makoto Uchida steps down, the Financial Times reported on Tuesday citing a person familiar with discussions.

Uchida had been one of the strongest advocates within Nissan for a deal with Honda. However, relations between Uchida and his counterpart Toshihiro Mibe deteriorated as Honda became frustrated with the speed of Nissan’s restructuring and the depth of its financial troubles.

Honda may be willing to restart negotiations that fell apart earlier this month, on the condition that Nissan CEO Makoto Uchida leaves the automaker, according to a Monday report from the Financial Times.

The Japanese automotive sector is at a crossroads as Nissan faces a pivotal leadership shake-up that could reignite stalled merger talks with Honda. The collapse of discussions last week between Japan’s second and third-largest automakers left Nissan grappling with uncertainty.

In a startling vote of no confidence, Honda is open to restarting merger talks with Nissan, but only if the latter’s CEO Makoto Uchida resigns from the company. That’s according to at least one insider,

Japan's second- and third-largest automakers by sales after Toyota Motor had been in talks to create a $60 billion firm after a lack of hybrid models in the U.S. and competition from local rivals in China had sent Nissan's earnings diving.

In a joint statement released the same day, Honda acknowledged that it proposed to divert from its original intention of forming a joint holding company to one where "Honda would