GM and Honda form a strategic alliance in North America

KUALA LUMPUR: On Thursday, Honda Co. Ltd. and General Motors Co. announced signing of a memorandum of understanding, establishing a strategic alliance in North America. Under this alliance, both the automakers develop products, do purchasing, and a lot more.

In recent times, many automakers have teamed-up and formed such alliances, as investment is very high in automated, electric, and connected vehicles. And it is only through partnerships like these that the carmakers can survive and succeed in the game. Recently, Volkswagen AG and Ford Motor Co. joined hands to develop autonomous, electric, and commercial vehicles. Also, Group PSA and Fiat Chrysler Automobiles NV merged to build a new entity called Stellantis.

The GM-Honda alliance is an addition to their earlier collaboration for EVs. The two will now share vehicle platforms along with the propulsion system (both electric and combustion). The partnership covers several vehicles in each of the automaker lineup and cooperation in R & D, purchasing, connected services, and potential manufacturing efficiencies.

Honda executive vice president, Seiji Kuraishi said, "Through this new alliance with GM, we can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings. Combining the strengths of each company, and by carefully determining what we will do on our own and what we will do in collaboration, we will strive to build a win-win relationship to create new value for our customers."

GM President Mark Reuss said, "This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today's vehicle portfolio.

In addition, the said agreement covers four-vehicle architectures focused on mid-size pickups and crossovers.

The development planning discussions will begin right away between the Japanese and Detroit automakers, with engineering work commencing in early 2021.

Further facts of the alliance will be governed by a joint committee comprising senior executives of both the companies. A final agreement will be made for every vehicle Honda and GM built together.

Also Read: Japan officials tried to bring Honda and Nissan to the table for the merger