Honda and Hitachi Automotive Systems have announced plans to establish a joint venture company for the development, manufacture and sales of motors for electric vehicles. The two companies have signed a memorandum of understanding and will proceed to conduct formal discussions towards establishing the new company, with a definitive agreement set to be inked at the end of March.

The as-yet-unnamed company will be established in July, with the Hitachi holding 51% of the investment, and Honda the remaining 49%. Subsidiary operations of the new Japan-based JV are planned for the US and China, each with manufacturing and sales functions.

Together with the establishment of these operations, the new company will expand the global supply of motors, both to Honda and other automakers.

The companies say that with the market for electric vehicles expected to continue to grow, the collaboration will strengthen their competitive advantage and business foundation for the development of motors, which is the core of an electric vehicle system.