General Motors (GM) and Honda have just signed a non-binding memorandum of understanding to establish a North American automotive alliance. Under the proposed alliance, the two entities will co-develop and share common vehicle platforms, with planning discussions to begin immediately, followed by engineering work beginning in early 2021. North America is Honda’s biggest market, and GM’s second largest after China.

The scope of the propose alliance also includes cooperation in purchasing, research and development, connected services, as well as offering “a range of cars to be sold under each company’s distinct brands.” The GM-Honda relationship spans over two decades, with recent collaboration include co-developing fuel cells, batteries, and the Cruise Origin shared autonomous vehicle.

This new alliance, however, is created so that the two companies can leverage the best technologies, generating substantial cost efficiencies from shared vehicle platforms, propulsion systems, joint purchasing (sourcing of materials, logistics and localisation strategies), potential manufacturing efficiencies, and other collaborative efforts. They also plan to share R&D and engineering costs for jointly-developed vehicles and powertrains in the future.

Another area that will be further developed is connected services. Both parties will combine their R&D efforts in advanced technology areas, which include electrical architecture, advanced driver assist systems, infotainment, connectivity, and vehicle-to-everything communication.

Click to enlarge

Honda Motor executive vice president, Seiji Kuraishi said: “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,” he noted.

GM president Mark Reuss also said: “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.” All facets of the alliance will be governed by a joint committee, comprising senior executives from both companies.