Honda will move its automotive development unit back into its research subsidiary, reversing a restructuring carried out in 2020.
According to Nikkei Asia, the company plans to return responsibility for vehicle engineering to Honda Research and Development (R&D), in an effort to reinvigorate work on next-generation models.
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The change unwinds a 2020 decision to absorb development functions into the parent company, a move originally designed to streamline operations during a period of industry strain.
Under the revised framework, Honda R&D will operate with greater autonomy and oversee a system linking advanced research with downstream development, intended to allow broader technical experimentation.
The research arm was established in 1960 as a spin-off inspired by founder Soichiro Honda’s belief in separating experimentation from commercial pressures.
Historically, the unit focused on commissioned research while Honda Motor handled production and sales, a division that supported long-term projects such as engines compliant with tight emissions standards.
Honda’s decision reflects rapid shifts across the global automotive sector, including intensifying competition from Chinese manufacturers such as BYD, noted for aggressive pricing, the report added.
Honda and Nissan Motor entered merger discussions in late 2024 partly to reduce the cost of developing future vehicles, but talks ended over unresolved terms.
The two groups are now exploring collaboration on software development and North American manufacturing.
Honda Motor said last month that its global output climbed 4.3% from a year earlier to 283,161 vehicles in December 2025, rebounding from a 34% drop in November driven by semiconductor shortages and depleted inventories.
Japanese output climbed more than 9% to 61,417 units, while overseas production increased just over 3% to 221,744.
North American factories recorded a 29% rebound to 117,601 vehicles after November’s sharp fall, though this was partly offset by a 16% decline across Asia to 97,923 units, including an 11% drop in China to 68,201.
