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Honda & General Motors Sign MoU Toward Establishing A Strategic Alliance In North America

General Motors and Honda announced that they have signed a non-binding agreement after lengthy preliminary negotiations for the creation of a North American car alliance. A number of vehicles to be sold under the individual brands of each group, together with collaboration in purchasing, research and development, and related services, are protected by the proposed partnership.

In order to share similar vehicle technologies, including both electrical and internal combustion propulsion systems that fit with the vehicle architectures, Honda and GM are to partner on a number of segments in North America under the proposed alliance. Immediately, engineering work begins early in 2021 with talks on co-design planning.

The announcement is based on the April agreement to build two new Honda electric vehicles jointly on GM's highly scalable global Ultium powered EV platform. The GM-Honda partnership, which started over two decades ago, covers the latest cooperation among fuel cell companies, batteries, and the self-employed Cruise Origin vehicles.

"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," said 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," said Seiji Kuraishi, executive vice president of Honda Motor Co., Ltd. 

All facets of the partnership are regulated by a joint committee of senior management from both companies. For each vehicle they manufacture together, a final agreement will be reached.

Collaboration in purchasing to drive scale and efficiency

Honda and GM plan to work together to develop further cost efficiencies by using the size, experience, and best practices of both businesses. Collaboration on procurement will concentrate on mutual material sourcing, logistics, and localization strategies.

R&D and connected services cooperation to exceed consumer expectations

It is important to incorporate advanced technology, as market and regulatory requirements are changing. The partnership will explore the combination of R&D activities between the two companies in advanced technology fields, including electrical engineering, advanced driver assistance systems, information technology, networking and all communication in the vehicle sector in order to meet this challenge efficiently.

In April, the companies revealed GM's OnStar technology, technology and connected services would be integrated into Honda's two all-new electric vehicles, based on its global EV platform.

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