Honda Motor and Nissan Motor plan to collaborate in the development of a new software operating system (OS) for their next-generation vehicles, as the two Japanese automakers look to cut vehicle development and production costs amid intensifying global competition, according to local reports citing a source familiar with the matter.

As the automotive industry moves towards software-defined vehicles (SDVs), software and electronic hardware account for an increasing proportion of the cost of a vehicle, as advanced driver assistance systems (ADAS), autonomous driving, connected technologies, and AI assistants become core features in next-generation vehicles.

Nissan and Honda, which pulled back from a full merger in early 2025, have been discussing collaboration in a number of areas, including SDVs, and EV batteries and powertrain components.

These latest reports suggest that a new OS, which serves as the brain of a vehicle, will be developed based on Nissan’s existing OS. The two companies also plan to share key electronic hardware, including electronic control units (ECUs), with a formal agreement expected to be announced next month.

The decision to standardise software and electronic hardware was apparently made following recent progress in preliminary joint development.