Japanese car giants Nissan and Honda have agreed not to pursue a potential $60bn merger, but have said that they will continue to cooperate on the development of electric vehicles.

A merger could have created the fourth biggest car company in the world, however, the two boards could not see eye to eye on the structure of any new group. 

A statement from the two companies, together with Mitsubishi Motors, which as a potential third partner said, “Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.” 

Nissan is now seeking new potential investors as it looks to restructure its business and  reduce production capacity by some 20%.