Honda proposed changing the structure of the intended merger from a joint holding company, as agreed initially, to a deal with Honda as the parent company and Nissan its subsidiary through a share exchange. Both companies concluded eventually that it was best to “cease discussions,” the statement added.

Nissan and Honda ended talks to merge and create a $60 billion carmaker on Thursday, pitching Nissan into deeper uncertainty and underlining the difficulties faced by many auto manufacturers as Chinese rivals disrupt the industry.

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