Makoto Uchida, left, president and CEO of Nissan Motor Corporation, and Toshihiro Mibe, director, president and representative executive officer of Honda, hold a joint press conference on merger talks in Tokyo, Japan, Dec. 23, 2024. Reuters-Yonhap

Japanese automakers Honda, Nissan and Mitsubishi said Thursday they are dropping their talks for a business integration.

The automakers agreed to end their agreement regarding the consideration of the structure for a collaboration, their joint statement said.

Honda Motor and Nissan Motor announced in December that they were going to hold talks to set up a joint holding company.

Mitsubishi Motors had said it was considering joining that group.

From the start, the effort had analysts puzzled as to the advantages to any of the companies, as their model lineups and strengths overlap in an industry shaken by the arrival of powerful newcomers like Tesla and BYD, as well as the move to electrification.

Details as to why the talks unraveled weren't immediately available.

Honda and Nissan initially said they were trying to finalize an agreement by June and set up the holding company by August.

The three automakers will continue to work together on electric vehicles and smart cars, such as autonomous driving, they said Thursday.

In recent weeks, Japanese media had various reports about the talks breaking down, citing unidentified sources. Some said Nissan balked at becoming a minor player in the partnership with Honda.

Honda is in far better financial shape and was to take the lead in the joint executive team.

Nissan reported a loss for the July-September quarter as its vehicle sales sank, prompting it to slash 9,000 jobs. At that time, Chief Executive Makoto Uchida took a 50 percent pay cut to take responsibility for the results. (Reuters)