GM and Honda intend to form North American Automobile Union

On September 3, General Motors and Honda Motor announced the signing of a non-binding memorandum of understanding, and the two companies plan to establish an alliance in North America.
According to the proposed agreement, the alliance will enable the two companies to cooperate in multiple fields such as electric drive technology, internal combustion engines, automotive platforms, interconnection services (infotainment technology), procurement and research and development. At the same time, Honda and GM will also cooperate in certain vehicle models, and they have expressed their interest in sharing the car platform.
Through such cooperation, Honda and GM hope to save research and development funds, increase investment in next-generation technologies, and take advantage of scale in procurement, logistics and other businesses.
GM President Mark Reuss said: “By forming a strategic alliance, both parties will optimize resource allocation and accelerate investment in future travel.” Honda Executive Vice President Seiji Kuraishi also said: “With The GM alliance will enable us to significantly improve the cost efficiency of the North American market, thereby increasing investment in future travel technologies. On the other hand, we will continue to provide products with our own characteristics and market competitiveness.”
It is worth noting that in April, GM and Honda just signed an agreement to jointly develop electric vehicles using GM Ultium batteries and a new electric vehicle architecture. According to the agreement, the two Honda cars will be launched with the support of General Motors and even carry OnStar. Now, in less than five months, GM and Honda have signed an alliance agreement again, which shows that the cooperation between the two parties has gradually entered the “honeymoon period.”
In fact, GM and Honda have a long history of cooperation. As early as 2013, the two companies announced the cooperation to develop next-generation fuel cell systems and hydrogen storage technology; in 2017, the two companies jointly invested US$85 million to establish a fuel cell system manufacturing company.
In 2018, GM and Honda cooperated on the field of next-generation batteries to achieve the goal of cutting costs and accelerating the promotion of electric vehicles. GM’s Warren Battery Laboratory Technology Center in Michigan, USA, will cooperate with Honda’s R&D center in Tochigi. The scope of research and development includes new generation battery cells and battery modules.
Not only that, the two parties started cooperation on autonomous driving in October 2018 and plan to develop a mass-produced autonomous vehicle for the global market. To this end, Honda invested 750 million U.S. dollars in Cruise and promised to invest approximately 2 billion U.S. dollars in the project in the next 12 years. In May 2019, GM and Honda further deepened their cooperation in synergy between electric vehicles and smart grids.
With the slowdown in global automobile demand and the high research and development costs of emerging technologies, there are more and more cooperations such as Honda and GM.
At the beginning of this year, Volkswagen Group and Ford Motor Company formally announced the establishment of a global strategic alliance. Similar to Honda and GM, the two strategic alliances do not involve interactive shareholding, but the cooperation fields are very rich, including the launch of a new medium-sized pickup truck model developed for the global market in 2022, and plans to subsequently cooperate to launch commercial models in the European market. And electric vehicles, autonomous driving, smart mobility services, etc.
In the opinion of many people in the industry, whether it is Ford Volkswagen or GM Honda today, it is very similar that strategic alliances can share strength and reduce R&D costs. Undoubtedly, the era of “going alone” has passed, and moving forward together may become a development strategy that is more in line with market laws.