General Motors and Honda Motor Company are looking to strengthen their existing relationship in North America. The two automakers have announced they’ve signed a memorandum of understanding to explore the possibility of a strategic alliance in North America. The alliance would include sharing platforms, propulsion systems, R&D and more. 

The two companies say the scope of the alliance includes collaboration on a variety of segments in North America, intending sharing common vehicle platforms, including both electrified and internal combustion propulsion systems that align with the vehicle platforms. Co-development planning discussions have already commenced, with engineering slated to start in early 2021. 

“This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio,” said Mark Reuss, president of General Motors.

“Through this new alliance with GM, we can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings. Combining the strengths of each company, and by carefully determining what we will do on our own and what we will do in collaboration, we will strive to build a win-win relationship to create new value for our customers. In this way, Honda will continue making steady progress in solidifying our existing business by realizing strong products, strong manufacturing capability and a strong business structure,” said Seiji Kuraishi, executive vice president of Honda Motor Co., Ltd.

Today’s announcement builds on an announcement back in April between the automakers to jointly develop two all-new electric vehicles for Honda based on GM’s highly flexible global EV platform powered by Ultium batteries. It also builds on nearly two decades of collaboration between GM and Honda, which started back when GM procured 3.5-liter V-6’s and transmissions from Honda for the original Saturn Vue SUV. 

The driving factor of this strategic alliance is the sharing of R&D costs and adding additional scale for both automakers when it comes to purchasing and development costs. Given the high capital investment required of all automakers required for electrification, autonomous vehicles and connected services, strategic alliances like this will continue to be en vogue.