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.

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

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 of the trio,