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GM and Honda say alliance will help them develop electric and autonomous vehicles

a chevy bolt
General Motors

General Motors and Honda plan to form an alliance.  

The companies say they want to team up on developing vehicles for the North American market. The vehicles may share certain parts, but will still be sold under each company’s brand.

So far, they’ve agreed to a non-binding memorandum of understanding to pursue the alliance.

"We will work immediately toward completing definitive agreements and will have more details to share regarding financial benefits once those agreements are finalized,” said GM President Mark Reuss, in a statement issued by the company. “We expect vehicle co-development planning discussions to begin right away, with engineering work starting in early 2021.”

GM and Honda say the alliance will help them save costs on building electric and autonomous vehicles. And the proposed alliance would build on previous work the companies have done together.

“The business relationship between Honda and GM began over two decades ago and has accelerated in the past few years around several key technologies, including electrification and shared autonomous vehicles,” said Honda executive vice president Seji Kuraishi. “From these initiatives has come a solid foundation of teamwork and a strong relationship that we intend to formalize in a business alliance.”

Michelle Krebs, Senior Director of automotive relations for Cox Automotive and executive analyst for Auto Trader, says both GM and Honda have different strengths in the marketplace, so an alliance makes sense. She says GM focuses more on bigger trucks while Honda sells mostly cars and crossover vehicles.

“It looks to me on paper they’re more complementary than they are overlapping and competitive,” Krebs said Thursday on Stateside.

And Krebs says it will benefit both companies to share costs on developing new vehicle technology. She says both electric and autonomous vehicles require deep investments in research and development.

“And so we are starting to see companies join together and collaborate with their people, put their money together to develop these,” Krebs said on Stateside. “Because the other thing is, there’s no payback anytime soon on these.”

GM and Honda says once the alliance is finalized, they will create a joint committee with executives from each company to decide its course.

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Dustin Dwyer reports enterprise and long-form stories from Michigan Public’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Public since 2004, when he started as an intern in the newsroom.
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