Honda, Nissan near to reach deal on joint development of vehicle software

Honda Motor (HMC) and Nissan Motor (NSANY) are ​expected to agree as soon ‌as Monday on developing a shared operating system and onboard computer to go ​into new automobiles as early ​as 2029, the Nikkei newspaper reported ⁠on Saturday.

Honda told Reuters that the ​Japanese automaker was discussing "potential areas of ​collaboration" with Nissan and Mitsubishi Motors under their strategic partnership but that no deal ​had been decided.

A few months ago, Honda and Nissan tried to merge, without success.

Mark that all the auto makers have suppliers of auto software, they don't develop everything by themselves.

Nissan has a partnership with the private company Elektrobit, while Honda (as also Toyota) have long term contracts with Micware (NASDAQ: MWC), a Japanese company. Both Honda and Toyota hold 11.5% each in MWC.

These two companies focus on different layers of auto software:

Elektrobit focuses heavily on core vehicle infrastructure. Their products form the foundation of Electronic Control Units (ECUs) and high-performance central computers. They provide classic and adaptive AUTOSAR operating systems, micro-kernel architectures, and deep security middleware that manage fundamental vehicle communications, powertrain, and chassis control.

Micware's expertise is higher up the software stack, operating as a primary "Software Tier 1" provider for the digital cockpit. They specialize in In-Vehicle Infotainment (IVI) systems, human-machine interfaces (HMI), spatial intelligence, multimedia, location-based smartphone apps, and advanced 2D/3D navigation software built to deploy on high-level OS layers like Android.

A deal between Nissan and Honda will bring a boarder client basis for both their suppliers.
Especially for Micware, which was listed in NASDAQ last May, and it trades with metrics below the sector's average, like EV/EBITDA at 5 and P/E below 10.