Merger talks between Honda and Nissan have collapsed after the firms failed to agree on a multi-billion dollar tie-up deal. The Japanese car makers aimed to combine their businesses to fight back against competition from rival firms,

The Japanese companies’ decision to call off negotiations highlights the challenges legacy automakers face in partnering to tackle new technologies.

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.