Japanese auto giants Honda and Nissan confirmed they've scrapped merger talks announced in December​, ending a potential combination that would have created the world's third-largest automaker.

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

Nissan and Honda ended merger talks to forge a $60 billion car company on Thursday, pitching Nissan deeper into uncertainty and highlighting the pressure on legacy automakers from Chinese rivals upending the industry.