Honda and Nissan Sign Software Deal — a Year After
This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. Kazuhiro NOGI/Getty Images

Honda Motor Co. and Nissan Motor Co. signed a joint development agreement on Monday to standardize the computer systems and software running their next-generation vehicles, 18 months after the two Japanese automakers walked away from a $60 billion merger.

The deal covers core electronic control units, the in-vehicle operating system, middleware and vehicle-control software for so-called software-defined vehicles, according to a joint statement from Honda. The shared architecture is set to appear in both companies' vehicles starting in fiscal 2029.

There is no new company and no shared ownership. Honda and Nissan will keep designing and selling separate models, but the code running their dashboards, driver-assist systems and over-the-air updates will increasingly be built once and used twice.

That is a smaller ambition than the one the two firms abandoned in February 2025, when merger talks that would have created the world's third-largest automaker by sales collapsed after Honda proposed making Nissan a subsidiary, an arrangement Nissan's board would not accept, the Associated Press reported. Nissan has since cut 9,000 jobs and 20% of its global production capacity as it works through a financial crisis that followed the merger's collapse.

Both companies framed Monday's deal as a way to cut development costs and speed up how quickly they can compete against Chinese automakers such as BYD, which have used software-driven features to gain ground in Europe and Southeast Asia. Writing and maintaining millions of lines of vehicle code independently has become one of the costliest parts of building a modern car, and rivals including Volkswagen, BMW, Mercedes-Benz and Stellantis have pursued similar software-sharing arrangements among themselves.

Honda and Nissan said they will keep exploring further cooperation, including on carbon-neutral technology, but gave no timeline for any additional joint projects beyond the ECU and software work announced Monday.