GM and Honda partner up to develop future products together

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Cost-savings, quicker reaction to changing technology, and consumer satisfaction are all possible upsides

General Motors (GM) and Honda have inked a deal to share vehicle platforms and technology in North America starting next year. 

While the automakers say the deal they struck on Thursday is non-binding, their collective hope is to produce a wide variety of vehicles that would be sold under each company’s own banner. In addition, the two automotive giants would collaborate on connected services, research and development, and purchasing.

A 20-year old relationship

The business relationship between GM and Honda is nothing new. Actually, it began more than two decades ago and, over the last few years, has gained momentum as the two companies sought out commonalities in key technologies such as electrification and autonomous vehicles. 

“Our companies have different cultures and unique strengths, but we share several common goals,” remarked Honda Executive Vice President Seji Kuraishi.

“This includes a commitment to creating sustainable mobility with Zero Collisions and Zero CO2 emissions. Toward this shared objective, GM has demonstrated a major proficiency in battery electric vehicles, while, at Honda, our approach includes a portfolio of internal combustion engine and hybrid-electric vehicle technologies as we bridge to an electrified future.”

Splitting the more sizable costs

On paper and in real life, analysts say this deal makes perfect sense. Michelle Krebs, an executive analyst for Autotrader, told the Detroit Free Press that we're likely to see more these kinds of partnerships as brands try to stay competitive and keep up with emerging technologies. She noted that it's better to "share than go it alone.

"This is very significant news. GM and Honda have been working on a number of projects over the years. This takes their relationship to a whole new level. What’s notable about Honda is that it has remained fervently independent while others merge or do joint ventures," Krebs said

Great upsides for the consumer

If Honda and GM’s two-heads-are-better-than-one thinking works out according to plan, it’s the consumer who might be the big winner. Not only does the combination allow the companies to be more nimble in addressing shifting ever-changing consumer tastes and regulatory requirements, but the vehicle-buying public might also get cars and trucks they’re happier with.

According to Statista, Honda brand reached the highest consumer satisfaction in 2019 with a score of 88; GM (depending on the sub-brand, e.g. Chevrolet) averaged around a score of 80. If Honda can help move GM’s score up, then it’s a win for both manufacturer and consumer.

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