Honda and Nissan Agree to Joint Software Development Deal

Honda Motor Co. and Nissan Motor announced a joint agreement on Monday to develop next-generation in-vehicle operating systems and electronic control units. The partnership aims to accelerate software development and optimize resource efficiency for models arriving as early as the fiscal year beginning April 2029.

The agreement follows a period of negotiations and a failed 2025 merger attempt between the two companies that collapsed over disputes regarding Nissan's ownership structure. Before the final agreement, Honda also explored cooperation with Mitsubishi Motors to pool volume for batteries and shared platforms to reduce high development costs.

Both automakers are pursuing the alliance to counter weak sales in the United States and China, where Honda has seen a 50% year-over-year drop in retail units and projected EV-related losses of JPY520 billion. The move is a strategic response to increasing competition from Chinese manufacturers, including BYD Co. and Xiaomi Corp., which have gained market advantages through rapid software iteration and sophisticated battery-powered models.