GM Announces Honda Will Join Cruise Automation In Self-Driving Car Development
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Following a large investment from SoftBank earlier this year, General Motors and its Cruise Automation subsidiary welcome a new partner: Honda.
The Japanese automaker and GM announced on Wednesday they will join forces to develop self-driving cars and work to deploy the technology at a large scale. With the partnership, Honda will invest $2 billion over 12 years into GM Cruise with $750 million in equity now. The investment brings GM Cruise’s value to $14.6 billion.
Honda will work directly with GM and Cruise to develop a “purpose-built autonomous vehicle for Cruise that can serve a wide variety of use cases and be manufactured at high volume for global deployment,” said the automakers. Both GM and Honda will begin to explore global opportunities for the development of a new self-driving car network as well.
“This is the logical next step in General Motors and Honda’s relationship, given our joint work on electric vehicles, and our close integration with Cruise,” said General Motors Chairman and CEO Mary Barra. “Together, we can provide Cruise with the world’s best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology – while they move to deploy self-driving vehicles at scale.”
Honda said it chose GM after noting its continued work in the self-driving car and electric car space.
“We will complement their strengths through our expertise in space efficiency and design to develop the most desirable and effective shared autonomous vehicle,” Honda Executive Vice President and Representative Director COO Seiji Kuraishi, said.
GM and Honda have continued to cozy up to one another in recent years. Both automakers agreed to jointly develop next-generation electric-car batteries this past June with Honda prepared to source the batteries from GM directly. Additionally, the two companies established a joint venture for fuel-cell manufacturing with an $85 million investment into the Brownstown, Michigan, facility.
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An extra $2B plus perhaps some extra knowledge, that’s really good news for GM’s Cruise…
Interesting evolution…
Could we see a future where GM services are distributed through Honda’s European network, and where re-badged Honda platforms are distributed through Chinese GM Wuling or Baojun dealers ?
I couldn’t think of a better partner.
Could this be the initial stages of a GM-Honda merger? With the car sales trending downwards GM could benefit from Honda sedans and cut development instead of abandoning the segment.
“Could this be the initial stages of a GM-Honda merger?”
I think that’s a bit of a stretch. This is just one many hundreds of thousands of joint engineering agreements that automakers have with one another to split development costs and get the technology to market sooner.
With Toyota partnering with the smaller Japanese brands Honda’s best bet us GM with maybe in the long-term a Nissan-Renault type partnership.
In many ways Honda is a very American company, does a majority of sales in N America. With GM first dropping brands and later leaving India, Russia and the EU an alliance would be healthy.
Add PSA and get 17% of Europe, too. PSA is much improved while GM and Honda are quality and design leaders .
“In many ways Honda is a very American company, does a majority of sales in N America.”
By that kind of broken reasoning, Lamborghini is also American.
You’re the only one who thinks like that, Steve.
Honda America makes most of its vehicles in the US and has the highest rate if American content per vehicle.
A millenial does not know or care who ownes an automaker. This is why the domestics are loosing market share.
Need to dig deeper than who makes what Scott. It’s all about ownership! All people have been trending towards not owning any vehicle. It’s lroven by the expansion of all the lease deals! It’s not about Ford or Chevy, it’s about what fits in my budget. That’s why the AVs make a better business case going forward. Look at Lutzs video from this week. The man knows his stuff!
Opel is much improved now that it is making money for its new owners. Maybe GM management costs too much for Saab, Saturn, Vauxhall, etc.
When you view this from a distance you will see GM gaining credibility in the small car segment and Honda a truck platform. It’s a fit for sure and with all the reports about AVs narrowing the field it really isn’t a stretch and more like common sense.
This has nothing to do with a merger at this point in time. Honda needs a dance partner to share cost with to survive. GM has invested in technology to become a very viable leader in technology that makes the a prime go to company to partner with and share cost.
The main rub off here is if it is made well know GM has Honda in on their program it will give them a positive image on this technology.
Honda is just trying to control cost to remain as independent as possible.
Development cost will drive more and more joint partnerships so everyone saves money.
No one ever said this was going to happen tomorrow Scott. To your point it’s about saving money and development times. Well my friend that’s what mergers are all about and how they get started! I took a 2000 employee engineering company and after 6 mergers I had 55,000 employees and is one of the largest engineering firms in the US! I know how the dance works!
This is a good deal for GM. Eventually Cruise will be spun off, and the company will have 2.7 billion for research and development not to mention that the addition of Honda’s deep pockets helps reduce risk for GM should the first or second generation of Cruise products require recall or fall victim to lawsuit.
AV is a very new technology with many potential risks. GM doesn’t have Waymo’s deep pockets and therefore shouldn’t go it alone. Also, Honda makes for an ideal partner in this new era of alliances. As auto volume decreases I would not be suprised to see either a deeper partnership or merger. Honda, Chevrolet/GMC trucks, Cadillac plus Buick China make for a powerful stable.
Thank God! Self driving cars developed by GM alone would be downright scary. Honda just may have saved thousands of American lives!
I wish GM would do this alone so they can keep all the technology to themselves! Sharing technology to save money is stupid if GM can afford it!
If GM developed the technology and didn’t share it would be a way to put your competitors out of business.
That’s the approach I would take if GM can afford it!
No one will buy AVs unless it becomes a wide spread, common technology. GM alone can’t do this.
Also, GM is still a damaged company that many drivers consider sub par with Chevy seen as the low credit scrore brand.
Honda being part of the project will aid GM selling AVs even if badged as Honda on the coasts where Chevy product is rarely seen.
Also, GM Cruise is a technology company as opposed to a car maker. After the Softbank investment Cruise should be spun off as it will probably become more valuable than GM and service numerous carmakers.
Cruise competes with Waymo, not Honda.
Steve, ever here of Goldman Sachs? They predict by 2030 “the global ride hailing business could be worth $285B. Removing the driver from the business model through Autonomous driving technology and would increase the potential profit pool from $65B to $220B” ! GM owns Cruise and as long as they can do everything in-house from technology to manufacturing to Mavin they are not beholding to anyone. Also SoftBank is vested in Uber and that’s another Avenue GM can push this technology. Going this route initially makes the technology adopt the user and not the other way around as you state.
And you totally miss the point that the addition of Honda makes Cruise AV products appear far more creditable to the consumer who must adapt to and trust this new technology–especially on the coasts where GM vehicles are not nearly as popular as Honda.
Coastal Americans covet Honda and this can only mean goid things for Cruise which ultimatly will become of greater value than the rest of GM. Aside from trucks the domestic brands have a serious image problem and even though both Chevy and Buick actually best Honda according to JD Power this hasn’t translated into greater market share.
AVs will long term mean less brands, less volume, less differenciation so it is wise for GM to be teaming up with a highly regarded player as it competes with Waymo and others.
I missed nothing Scott. Ms. Barra is not concerned with perception . She is concerned with bringing the best product to market and the rest will take care of itself! GMs market share is doing better than any of the big players and Honda is a good catch but will not make or break what GM is going to do with GM Cruise.
Tucker didn’t share his technology so no rear-engine cars.
Im with you! You hit the nail on the head Brian! Most all reports show GM out front of the AV effort! I can see what’s in it for Honda to do this deal, but $750m up front and the rest spread out over 10 years is peanuts compared to what GMs AV effort true worth when it’s up and running and the only player in town. There is more to this than others would have you believe and the “end game” for GM isn’t just giving partners a leg up on other manufacturers. Bottom line is business and GM is in the driver seat. Ask Mr. Lutz !
By aligning with Honda it just tells me that now people will have the ability to choose Honda’s version over GMs version. If you are the only player in town or the one that controls the most intellectual property then the industry has to play by your rules. If your the first one to market and the only one for say 5 years then that means GM would control the industry.
I am not interested in helping a competitor
Do you think the government would even allow GM to keep all of the technology to themselves? Or would they force GM to sale the technology to other manufacturers so they can compete.
Brian here are the cold hard facts as told by Motor Trend Nov 18- “ an automaker operating its own autonomous ride hailing fleet could make $14,000 per car over 3 years, nine times the average profit it makes selling a single vehicle. GM Cruise will lead the way!
There is plenty of legit competition in this segment Brian (see Google). The carrot in this is being the first and having the best product and GM has the jump. That’s why it’s worth keeping it to yourself unless you have other motives. It’s all about survival now as car ownership shifts to car sharing and AVs.