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Published on September 21st 2020 in

General Motors and Honda establishing a strategic alliance in North America

General Motors and Honda have announced they have signed a non-binding memorandum of understanding following extensive preliminary discussions toward establishing 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, as well as cooperation in purchasing, research and development, and connected services.

Under the proposed alliance, Honda and GM would collaborate on a variety of segments in North America, intending to share common vehicle platforms, including both electrified and internal combustion propulsion systems that align with the vehicle platforms. Co-development planning discussions will begin immediately, with engineering work beginning in early 2021.

The announcement builds on the agreement signed between the companies in April to jointly develop two all-new electric vehicles for Honda based on GM’s highly flexible global EV platform powered by Ultium batteries. The GM-Honda relationship, which began more than two decades ago, includes recent collaboration between the companies on fuel cells, batteries and the Cruise Origin shared autonomous vehicle.

“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 realise 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 realising strong products, strong manufacturing capability and a strong business structure,” said Seiji Kuraishi, executive vice president of Honda Motor Co., Ltd.
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An alliance in North America between GM and Honda would leverage the best technologies and generate substantial cost efficiencies from shared vehicle platforms and propulsion systems, joint purchasing, potential manufacturing efficiencies and other collaboration efforts. They also plan to share R&D and engineering costs for select future co-developed vehicle and propulsion platforms and collaborate in joint purchasing activities to create further cost efficiencies by leveraging both companies’ respective scale, insight and best practices.

This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: www.collisionweek.com.

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