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GM and Honda Announce Major Partnership

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There’s a clear industry trend already existent throughout the industry, one that will likely grow before it ever fades. It involves partnerships between major automakers. Today, once again, two major players have given proof of this, as General Motors (GM) and Honda announced a major R&D partnership.

To use the exact words used by the two automakers, they have agreed on a memorandum of understanding to establish a strategic alliance in North America. The companies will look at the possibility of sharing platforms and propulsion systems across their respective product lines. The aim is also to work conjointly on innovations and technologies, particularly those related to electrification.

The agreement is said to be non-binding. What is being sought is cooperation in procurement, research and development and related services. Each side will continue to operate freely and according to its own orientations.

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As for the more specific sharing of elements that will be found on both companies' vehicles, the companies say that “Co-development planning discussions will begin immediately, with engineering work beginning in early 2021.”

Last April, GM and Honda signed an agreement for the development of two new electric vehicles for Honda, two products based on GM's platform that will benefit from the American auto giant’s new Ultium batteries.
 
“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.”

- Mark Reuss, President of General Motors
 

“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.  In this way, Honda will continue making steady progress in solidifying our existing business by realizing strong products, strong manufacturing capability and a strong business structure.”

- Seiji Kuraishi, Honda Motor Co., Ltd Executive Vice President

At the end of the day, the crucial element for both companies is the possibility of economies of scale. This will allow both GM and Honda to invest more in advanced technologies and other areas of interest.
 
All aspects of the alliance will be governed by a joint committee made up of senior executives from both companies.

If this announcement is mainly about the corporate side of the business, it will have a significant impact on consumers in the next few years, though what precisely that impact will be remains to be seen. There’s no doubt that this kind of partnership will serve both manufacturers and allow them to offer products and technologies that without this kind of deal would be impossible.

Stay tuned.