Honda, GM Ink MoU on North American Alliance!

General Motors and Honda have signed a non-binding memorandum of understanding following “extensive preliminary discussions” to establish a North American automotive alliance. The Alliance follows collaboration in electrified vehicles and technologies. (GM and Honda to Jointly Develop Honda Electric Vehicles)

While this is consistent with an industry trend to share ruinous development costs on future CO2-free vehicles, the vast financial resources of both global automotive giants underscore the severity of the problem that automakers face. For some companies mergers will be the only way to survive if they survive at all.

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 companies said in joint releases. (Honda, GM Expand Cooperation for Next Gen Battery)

An alliance between Honda and GM would share technologies and generate substantial cost efficiencies, it’s claimed, from common vehicle platforms and propulsion systems, joint purchasing, potential manufacturing efficiencies and other collaboration efforts. This would enable both GM and Honda to make greater investments in advanced and next-generation technologies. (GM and Honda to Make Fuel Cells in Michigan)

GM and Honda also plan to share R&D and engineering costs for some future co-developed vehicle and propulsion platforms. This would – in theory – create substantial efficiencies and free capital, allowing both companies to meet the increasing requirements to invest in mobility trends and additional growth opportunities for each company’s brands.

How distinct they can be remains to be demonstrated.