Nissan and Honda cancel their $50 billion merger "to prioritize speed of decision-making," they said.The merger would have created the world's third-largest automaker by sales volume.Both automakers face challenges with declining sales and slow transition to making EVs.Japanese automakers Nissan and Honda have called off a $50 billion merger that would have formed one of the world's largest car companies.Both firms said in a statement on Thursday that they called off the deal "to prioritize speed of decision-making and execution of management measures" as an "increasingly volatile" car market heads into an electric-vehicle era.The automakers said they would continue to work in "the framework of a strategic partnership" moving forward.Nissan and Honda first announced they were beginning merger talks in late December. Had the merger happened, it would have created the world's third-largest automaker by sales.In December, Nissan's disgraced former CEO, Carlos Ghosn, called the deal a "desperate move" for Nissan because he saw little complementarity."It's not a pragmatic deal because frankly, the synergies between the two companies are difficult to find," Ghosn said at the time.Between 2001 and 2017, Nissan was led by Ghosn, who was arrested in Japan on suspicion of financial misconduct during his time as CEO of the company. In 2019, while under house arrest, he escaped from Japan to Lebanon by hiding in a large box that was shipped as cargo on a private jet.Struggling automakersThe end of the merger talks comes at a difficult time for both Japanese automakers.Nissan has been struggling with falling profits and decreased sales globally in the past year. The company faces declining sales in China due to competition from a slew of local players. It has been slow to produce electric or hybrid vehicles, which have been in demand compared with gas-only models.In the US, sales of Nissan's electric vehicles have suffered because they do not qualify for the $7,500 US government tax credits for cars built in North America.In November, the company slashed 9,000 jobs globally in a cost-cutting attempt and started a voluntary buyout over the summer.Honda, meanwhile, has been lagging behind Chinese players in shifting to EVs and has invested less than other rivals in new car designs and technologies.Nissan's stock has seen a 26.5% rout in the past year, while shares of Honda have fallen 20% in the same time.