'Sharing Car Engines'... Honda and GM Partner on Core Businesses Following Electric Vehicles

Limited to North American Market... Unusual Sharing of Core Business
Choice for Survival... Japanese Media Predicts "Alliance Formation"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Japanese automaker Honda and American company General Motors (GM) announced on the 4th, according to Nihon Keizai Shimbun, that they will strengthen their strategic alliance to share engines and platforms of internal combustion engine vehicles sold in the North American market.

According to the report, the two companies are considering jointly using engines and platforms (chassis) and procuring parts together.

Previously, the two companies had cooperated in developing next-generation technologies such as autonomous vehicles and electric vehicles, but this expands the cooperation to core business sectors.

Seiji Kuraishi, Vice President of Honda, stated, "By reducing costs in the largest market, North America, the resources secured this way can be invested in future mobility technology development and areas where Honda has competitiveness, allowing us to maintain a dominant market position."

Honda and GM plan to start cooperative projects such as joint platform development from early next year. However, they added that at this point, the scope of cooperation is limited to the North American market and they are not considering capital alliances.

This alliance is considered unusual because it targets areas that determine the core competitiveness of both companies, such as gasoline and hybrid vehicles.

GM President Mark Reuss commented, "By sharing management resources that both companies have, we can accelerate investment in innovative mobility technologies."

Until now, the alliance between Honda and GM has focused on next-generation technologies with smaller market sizes.

The two companies began their partnership in 2013 in the fuel cell vehicle (FCV) field and in 2018, Honda announced an investment in GM's autonomous driving development subsidiary.

In April of this year, they decided to produce two jointly developed EV models at GM factories and have Honda sell them in the United States and other markets.

The method of promoting commonality of engines and chassis to improve cost competitiveness, as in this alliance, has already been implemented by the Renault-Nissan-Mitsubishi alliance.

However, unlike the Renault-Nissan-Mitsubishi alliance, Honda and GM are pursuing cooperation in key areas without capital alliances.

Nihon Keizai Shimbun analyzed that amid the worsening business environment due to the novel coronavirus (COVID-19) and other factors, mergers and alliances in the automotive industry are becoming full-scale.

This content was produced with the assistance of AI translation services.