• GM, Honda Agree To Develop Future Products In North America
• Honda has for years remained largely independent
General Motors (GM.N) and Honda Motor Co (7267.T) on Thursday revealed plans to team up in North America to make a range of vehicles, deepening their ties as the auto industry comes under greater pressure to share technology and costs to meet demands for cleaner vehicles.
GM and Honda plan extensive alliance to share platforms, engines
Under the alliance, Honda and GM said, the companies intend to share common vehicle platforms, including electrified and internal combustion propulsion systems.
The companies still need to complete a definitive agreement and officials said greater details on expected cost savings would be available then, but a person familiar with the matter said the savings would run in the billions of dollars for each company. The partnership represents a significant expansion of existing collaborations between the two companies on electric and autonomous vehicles, connected vehicle technology and fuel cells. Honda is an investor in Cruise, the self-driving business that GM majority owns.
The deal marks another milestone in the consolidation of the global auto industry
“Overall, we believe this alliance would help both companies realize significant cost savings in the development of our vehicle portfolios,” GM President Mark Reuss said in a statement.
The deal marks another milestone in the consolidation of the global auto industry, as pressures to cut emissions and move toward EVs strain the capital and engineering resources of even the largest players.
GM and Honda said in April they would jointly develop two new EVs for Honda and were planning to explore more ways to expand their alliance. They have already worked together on the design of an autonomous vehicle called Cruise Origin, and also collaborated on fuel cells and batteries.
Honda has for years remained largely independent, staying clear of industry mergers. But the GM alliance will give it economies of scale it cannot achieve on its own, Honda Executive Vice President Seji Kuraishi said. North America is Honda’s largest market and GM’s second largest behind China.
GM and Honda said joint development discussions will begin immediately, with engineering work starting in early 2021.