GM, Honda strike deal to collaborate on cars
In amemo of understanding, the carmakers say they plan to share technology costs aswell as engines and transmissions.
General Motors and DETROIT—
Honda aremoving toward an allianceinNorthAmericatosharevehicle development and technology costsastheindustrymoves toward electric and autonomous vehicles.
The nonbinding memorandum of understanding was announced Thursday, and the companies say they plan to share vehicle underpinnings as well as engines and transmissions.
It’s another sign of increasing consolidation in the automotive business as companies face huge capital outlays to develop current products as well battery-powered and self-driving vehicles.
“Theautoindustryhasalonghistoryofbeingpressuredbycostsand lower(profit)margins,”saidEdward JonesanalystJeffWindau.“They’re trying to get to the other side here on an expensive vehicle development process, and being able to do that as efficiently as possible.”
No details were given on what vehicleswouldbedevelopedjointly, but the companies said in a statement that planningwork will start immediately and include vehicles powered by both electricity and internalcombustionengines. Engineeringworkwouldbeginearlynext year. They also will cooperate on manufacturing, parts purchasing, research and connected services.
Earlier this year, crosstownrival Ford finalized a similar deal with Germany’sVolkswagen, while Italian-AmericanautomakerFiatChryslerisheadingtowardamergerwith France’sPSAPeugeotearlyin2021.
In theGM-Honda deal, the companies say they’ll collaborate on a “rangeof vehicles sold under each company’s distinct brands.”
The announcement builds on work the companies have been doing jointlyonelectricandhydrogen fuel cell vehicles, aswell as an autonomous vehicle. In April the companiesannouncedtheywould jointlydeveloptwoelectricvehicles forHondabasedonGM’sglobalelectric vehicle platform. Windau said the fuel cell work started in 2013, so it’s no surprise that the cooperation would be broadened.
“Thealliancewillhelpbothcompanies accelerate investment in futuremobilityinnovationbyfreeing upadditional resources,” GMPresident Mark Reuss said. He said the companies would get “significant synergies” in developing vehicles.
“Wecanachievesubstantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings,” Honda ExecutiveVicePresidentSeijiKuraishi said in a joint statement.
Thealliancewould be governed byajointcommitteeofseniorexecutives from both companies, the statement said.