General Motors and Honda deepen cooperation

The companies want to sell their cars on common platforms. This applies to both electric cars and cars with internal combustion engines.

The US automaker General Motors and its Japanese partner Honda are expanding their collaboration. Both companies want to sell cars under their brands in North America on the basis of common platforms, as GM announced on Thursday. The cooperation affects both cars with electric drives and cars with internal combustion engines.

The limited partnership with Honda to individual products let GM boss Mary Barra exist after her group withdrew from the international market three years ago with the sale of Opel to PSA. In fact, the cooperation was subsequently expanded.

With the new alliance in the North American market, GM and Honda are further strengthening their cooperation. The two car companies had already announced a further collaboration in the field of electric cars in April.

Because one thing is clear at GM: The future is electric. Barra wants to turn the company into a pure electric car manufacturer and invest a total of $20 billion in development by 2025. Barra plans to bring at least 20 new all-electric cars to market by 2023.

Together with Honda, two electric cars are now being developed that will be built on GM’s platform and will use GM’s modular “Ultium” battery system. The companies also have partnerships in fuel cells and batteries. In addition, after a 2.75 billion investment, Honda holds a stake in “Cruise”, GM’s subsidiary for autonomous driving.

Analyst Michelle Krebs from Autotrader rates the evaluation of the cooperation positively: “It takes your partnership to a whole new level”. Morningstar analyst David Whiston has also praised the alliance because it could potentially bring high returns with low risk. The partners complemented each other because Honda is particularly strong in the classic car market, while GM has the know-how for large SUVs, pickups and light trucks.

The Japanese analyst Takaki Nakanishi from Nakanishi Automotive Research also thinks a lot of the new collaboration: In order to react to the so-called CASE trend towards networked, autonomous, shared and electrified vehicles and to ward off attacks by IT companies and startups, “alliances increase efficiency in the traditional areas and redirect resources to the CASE area,” he is convinced. CASE corresponds to the English terms for the sub-areas listed: connected, autonomous, shared, electric. It is the four megatrends that define the future of the automotive industry.

In order to be able to increase profits, corporations would have to form alliances with a production volume of around 15 million vehicles, says Nakanishi. “GM and Honda have to join hands, otherwise they will fight for survival. It’s a natural choice,” he says.

Car manufacturers around the world are increasingly relying on partnerships to cut costs. A prominent example is the alliance between Volkswagen and Ford for electric cars and autonomous driving.

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