Honda and Nissan are taking their cooperation deeper, with the two Japanese automakers agreeing to jointly develop the software and electronic systems that will power a new generation of vehicles from fiscal 2029.

The companies said on Monday that they will work together on standardised electronic control units (ECUs) for software-defined vehicles, along with an in-vehicle operating system, parts of the middleware and vehicle-control software.

The technology is expected to form part of the electrical and electronic architecture of their next-generation software-defined vehicles beginning in fiscal 2029.

Software-defined vehicles rely increasingly on computer systems and software to control and update functions that were traditionally handled mainly through mechanical components. The technology can support features such as connected services, driver assistance and software updates after a vehicle has been sold.

For Honda and Nissan, the agreement is largely about sharing development work and making their engineering efforts more efficient. The companies said standardising core technologies should help them reduce development costs, speed up development and benefit from economies of scale.

The agreement covers several of the computers that sit at the heart of a modern vehicle, including high-performance main ECUs and zone ECUs. Honda and Nissan will work on common specifications for these systems as well as the software that runs on them.

The partnership comes as established carmakers face increasing competition from companies that have made software, connectivity and advanced electronic features central to their vehicles. Chinese manufacturers in particular have been moving quickly in this area, putting pressure on Japanese, European and American automakers to accelerate development.

The new agreement also has an interesting history. Honda and Nissan began exploring broader cooperation in 2024, including potential collaboration around electric vehicles and next-generation technologies. Their discussions later moved towards a possible merger, but those talks eventually collapsed.

The two companies have nevertheless continued looking for areas where cooperation could make sense.

Their latest agreement is not a merger. Instead, Honda and Nissan will remain separate companies while sharing development work on important vehicle software and electronic architecture.

Mitsubishi Motors, which is part of Nissan's wider alliance, is also considering taking part in the software collaboration. Discussions about its possible involvement are continuing.

For drivers, the effects of the partnership are unlikely to be visible immediately. The companies are targeting vehicles based on the jointly developed architecture from fiscal 2029, meaning several years of development work remain before the technology reaches production models.

The agreement nevertheless signals how much the automobile industry is changing. Cars are increasingly becoming computing platforms on wheels, with software playing a growing role in everything from vehicle controls to connected services.

Honda and Nissan are now betting that developing some of that technology together will help them move faster while controlling the cost of building increasingly sophisticated vehicles.