DETROIT – General Motors made an announcement Thursday that left many shaking their heads -- the company signed an agreement with Honda to work together building cars and technology.
Auto analyst David Cole called the agreement “coopetition,” which auto companies work together to save money. That’s needed now more than ever, and with the Honda Motor Company getting involved, that should tell how important coopetition is.
The agreement wasn’t completely out of the blue as the two companies agreed to work on next-generation electric vehicles in April. Thursday’s announcement takes that to the next level with a non-binding memorandum of understanding, creating a North American automotive alliance to develop advanced technologies.
The companies will share common vehicle platforms -- electrified and internal combustion propulsion -- meaning some vehicles will be GM underneath Honda exteriors.
Engineering begins in early 2021.
“Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio,” said GM president Mark Reuss.
Autotrader analyst Michelle Krebs said the industry is changing right before our eyes.
“All of the automakers know eventually electrification, autonomous vehicles and connectivity will be the way of life, but that’s far off in the future,” Krebs said. “They’ve got to make investments now and those investments are huge and there’s no payback anytime soon.”
So if in need of electric cars and connectivity, one would partner, and Honda was not thought of as a likely candidate.
“It’s been stand-alone -- like BMW really stand-alone company -- but the way the future, the way we’re headed in the future, it’s probably not possible for them to take this all on by themselves,” Krebs said.
GM’s subsidiary Saturn’s best-selling vehicle, the Saturn Vue, was largely a Honda underneath.
Considering the pandemic and the billions needed to fund future technologies, there’s no going in it alone anymore.
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