Following news Honda would bring $2.75 billion to the table and invest in General Motors’ Cruise Automation subsidiary, we decided to take a look back on where the Japanese and U.S. automakers have decided to cozy up.
2013
The timeline for true major partnerships began in 2013. Honda and GM both agreed to collaborate on next-generation fuel cell system and hydrogen storage technologies. Five years ago, the goal was to bring a commercially-feasible solution to market by the 2020 timeframe.
Both automakers have been leaders in the hydrogen fuel cell segment. GM began its “Project Driveway” in 2007 with a fleet of 119 hydrogen-powered first-generation Chevrolet Equinox crossovers. Honda began leasing the FCX hydrogen car in 2002, deploying 85 units to customers in the U.S. and Japan.
2015
Two years later, Honda signaled it wanted to increase its collaboration with GM. At the time, Honda said the fuel-cell partnership was going very well and both automakers were looking into expanding their work across various technologies. Self-driving cars, IT, and electrification technologies were all on the table. At the time, Honda did not have any concrete plans for self-driving technology, while GM was busy developing Cadillac’s Super Cruise semi self-driving system.
2017
Two years later, Honda and GM announced a major partnership. The two automakers planned to establish a joint-venture for fuel cell manufacturing. The new venture made for an $85 million investment in the Brownstown, Michigan, battery pack manufacturing facility. The joint-venture, called Fuel Cell System Manufacturing, LLC, will eventually churn out fuel cells for commercial vehicles. Both GM and Honda continued to share learnings through their fuel cell programs and filed for 2,200 patents combined.
2018
This year brought two major milestones for the GM-Honda relationship. This past June, both automakers inked a deal to partner on future electric-car batteries. Both automakers will develop a next-generation battery for electric cars, and Honda agreed to source the units from GM directly. The new batteries will specifically address the needs of North American drivers, i.e., higher energy density, smaller packaging and faster-charging capabilities for both companies’ future products.
On October 3, Honda announced it would invest a total of $2.75 billion int GM Cruise over the next 12 years. The Japanese automaker will also join GM and develop a future self-driving car tailor-made for autonomous technology. Honda’s influence won’t be immediate; current GM Cruise prototypes are all based on the Chevrolet Bolt EV. Neither automaker is sure what kind of car will come from the latest partnership.
Comments
Another example of GM and Honda working togerther, remember when GM bought Honda V6 engines for the Saturn Vue several years ago.
With Toyota and Nissan teaming up with most of the Japanese domestics Honda has no choice but to look to GM.
GM could easily go it alone. Soon after spin off Cruise will have a greater market valuation than GM. Once US volume drops to by 50 percent due to AV ride sharing, GM, and most other automakers, may go bust due to shuttered factories and legacy costs but GM stock holders will maintain value/wealth via convertable shares in Cruise AV. The shift to AVs will kill brands, companies and lead to mergers.
None of this will happen overnight. No one really knows how long it will take for Americans to embrace this new technolgy plus the US lacks infastrucure. Honda joining will spread out costs, risk and given Honda’s solid reputation, aid in adaption. Honda will also allow Cruise to enter the difficult Japanese market. Lastly, the Honda brand is a valuable addition that would make Cruise globally unstopable.Chevy just can’t can’t compete.
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Does anyone think GM and Honda will merge?
Such a deal would give GM a ticket into the valuable Japanese market, Asia in general, plus mean a return to Europe. GM would be able to kill Holden in OZ.
GM and Honda build excellent products. GM is the only US carmarker with quality equal to a Japanese brand so try would probably be a good fit.
I see this or Honda buying FCA in an effort to grow.
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HRSS is an audit & tax accounting CPA firm focusing on strategic tax advisory services for businesses & individuals alike in Houston.
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