General Motors and Honda have announced a non-binding memorandum of understanding after preliminary discussions about a North American automotive alliance. The scope of the proposed alliance includes a range of vehicles to be sold under each company’s distinct brands. Both automakers would cooperate in the areas of purchasing, research and development, and connected services.
Cost Reductions & New Investments
Under the suggested alliance, General Motors and Honda would share vehicle platforms, both gasoline and electrified, across multiple North American segments. General Motors and Honda are seeking to generate substantial cost reductions and manufacturing efficiencies through the shared vehicle platforms. As a result, both automakers can make more significant investments in new technology, including those related to the future of transportation.
“This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources,” said Mark Reuss, President of General Motors. “Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio.”
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“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,” explained Seiji Kuraishi, Executive Vice President of Honda Motor Co., Ltd. “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.”
According to both companies, co-development planning discussions will begin immediately, with engineering work set for early 2021. Purchasing collaboration will focus on joint sourcing of materials, logistics, and localization strategies. R&D efforts between the two companies will encompass new ADAS technologies, electrical architectures, infotainment and connectivity systems, and vehicle-to-everything communication. All facets of the alliance will be governed by a joint committee, comprising senior executives from both companies.