The Zhitong Finance App learned that Honda Motor (HMC.US) and Nissan Motor announced on Monday that the two sides have reached an agreement to jointly develop core software for next-generation automobiles. This is the first major cooperation since the two Japanese car companies terminated merger negotiations last year. According to the agreement, the two sides will jointly develop a next-generation in-vehicle operating system and an electronic control unit (ECU) to act as an automotive central computing system. The technology is expected to be applied from the fiscal year beginning in April 2029.
The new operating system and electronic control unit will be based in part on Nissan's existing technology and incorporated Honda's R&D opinions, and the design takes into account the compatibility of pure electric vehicles, hybrid vehicles, and fuel vehicles. Notably, Mitsubishi Motors, where Nissan holds a portion of its shares, will also consider adopting this technology.
Software has become a key competitive differentiator for automobile manufacturers, and for a long time, car companies have mainly focused on refining hardware such as engines and transmissions. Today, in the face of Chinese competitors such as BYD and Xiaomi continuously launching electric models equipped with cutting-edge technology, Honda and Nissan are trying to integrate resources and speed up the pace of software development.
Modern cars are increasingly architecting around central computing units. Through over-the-air upgrade (OTA) technology, vehicles can still get functional improvements months or even years after leaving the factory.
The current business situation of Honda and Nissan is not optimistic. In fiscal year 2025 (April 2025 to March 2026), Honda's global sales volume was 3.387 million units, down 8.8% year on year; net loss reached 423.9 billion yen (approximately RMB 17.83 billion), compared to profit of 853.8 billion yen for the same period last year. Nissan's global sales volume was 3.15 million units, down 5.8% year on year, with a net loss of 533.1 billion yen (approximately RMB 22.43 billion).
Both companies are facing weak sales pressure in the Chinese and US markets, and there is an urgent need to reduce costs and enhance product competitiveness through technical collaboration. The two companies said in a statement that the cooperation aims to shorten the software development cycle and improve the efficiency of resource allocation.
Through standardization of underlying basic technology, the two sides aim to integrate engineering technology experience and R&D resources, effectively share R&D costs while improving R&D efficiency, and exert greater economies of scale. Expanding the scale of models equipped with unified operating systems and electronic control units will not only improve cost efficiency, but the increase in the amount of data collected by vehicles will further enhance R&D competitiveness.
Looking back at 2025, the two companies were considering merging, which would theoretically create one of the world's largest car companies. However, as Nissan objected to Honda's request to turn it into a wholly-owned subsidiary, the merger negotiations eventually broke down.
Since then, the two sides have maintained a strategic partnership with Mitsubishi Motors, and have had technical cooperation precedents in fields such as electric vehicles.