Nissan and Honda’s automaking plans are advancing indirectly through a new wave of cooperation between their key suppliers, as the industry pushes toward software-defined vehicles that can be updated and improved through software.
Jatco, a Nissan subsidiary known for transmissions, and Hitachi Astemo, a major parts supplier affiliated with Honda, have begun exploring joint development of next-generation vehicle technologies that rely on digital tools. The collaboration is focused on building autonomous driving simulation capabilities and data analysis methods that can support software development for future vehicle functions. The supplier-level effort is also expected to mesh with parallel discussions between the automakers over standardizing electronic control units (ECUs), often described as the “brains” that coordinate core vehicle systems.
Although merger talks between Nissan and Honda previously collapsed, the latest supplier partnership signals a practical shift toward faster progress without full corporate integration. Instead of combining operations at the top level, both automakers are continuing discussions while their affiliated companies seek targeted areas of shared development—an approach aimed at reducing costs and leveraging complementary expertise.
Supplier roles and what they hope to build
Hitachi Astemo, headquartered in Tokyo, is an established supplier of automotive components including engine-related parts and electronic control devices used in advanced driver-assistance systems (ADAS). Honda is in the process of increasing its ownership of Hitachi Astemo, raising its stake to 61% and moving toward making it a consolidated subsidiary.
Jatco, based in Fuji City in Shizuoka Prefecture, is 75%-owned by Nissan. The company holds a large global presence in drivetrain components, particularly continuously variable transmissions (CVTs), and is also developing electric drive units designed for the shift toward electrification.
Together, the companies are expected to deepen cooperation on ECU standardization and on creating integrated simulation environments in virtual spaces. Those simulation and analysis platforms are intended to support SDV development by allowing teams to test and refine vehicle control software in digital environments.
Why standardizing ECUs matters
Honda and Nissan are negotiating efforts to standardize ECUs across their next-generation platforms. Because ECUs govern essential functions such as engine operation, braking, and steering, using common systems could reduce duplication in software development and allow similar applications to be reused across vehicles built on the same underlying architecture.
In the SDV era, competitiveness is increasingly tied to how quickly vehicles can receive software updates and how richly those updates can expand features—rather than relying solely on hardware performance. That shift is intensifying pressure on Japanese automakers to align platforms and development processes to keep pace with competitors.
Industry reorganization and faster development through digital testing
The supplier collaboration is also being viewed as part of a broader reorganization of Japan’s automotive supply chain. Hitachi Astemo and Jatco—companies linked to different traditional supplier networks—are effectively creating a new development framework that goes beyond longstanding affiliated trading relationships.
A key goal of the digital approach is to reduce the number of physical vehicle tests by using virtual simulations instead. If successful, that could shorten development timelines and lower costs, while enabling quicker iteration of vehicle control software as data from driving scenarios is collected and analyzed.
Meanwhile, negotiations between Nissan and Honda are continuing with the aim of reaching a basic agreement by this summer. If ECU and supplier collaboration talks advance in parallel, the industry could see a new example of “open innovation” in Japan’s auto sector, even after the earlier merger plan failed.
