GM and Honda to Form North American Alliance

General Motors and Honda announced they have signed a non-binding memorandum of understanding to establish a North American automotive alliance. The scope of the proposed alliance includes a range of vehicles to be sold under each company’s distinct brands, as well as cooperation in purchasing, research and development, and connected services.

As this news dominates today’s headlines, Cox Automotive analysts weigh in.

Michelle Krebs, executive analyst, Cox Automotive

This is very significant news. GM and Honda have been working on a number of projects over the years. Long ago, they did an engine deal. More recently, they have been working on fuel-cell vehicles and an autonomous vehicle through Cruise Automation. 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 pursue joint ventures.  

The automotive industry is headed into what will be a transformative decade, so clearly everything is on the table right now. We have been seeing and likely will continue to see more of these joint ventures and strategic alliances as we move toward a future that requires significantly improved efficiencies, huge investments in future technologies, and a variety of mobility solutions. The costs of this transformation will be enormous. Every automaker is asking the same question: Do we share the costs or go it alone?

Brian Moody, executive editor, Autotrader

An established automaker with a century of building, marketing, selling and servicing vehicles has the best chance at cracking the code of personal transportation and mobility 2.0. Combining the power of two successful, established automakers – even better. A GM and Honda partnership could be very powerful, each bringing a unique set of products, services, and fans. Their current geographic footprints in North America and product strengths complement each other well. From fuel cells to full-size trucks to automated service vehicles, the potential is enormous.

See this Data Point for more perspective on how the two companies appear to complement each other more than overlap, particularly in terms of geographic footprint, product offerings and price categories of products.

If you would like to speak with one of the expert analysts from Autotrader, Kelley Blue Book or any member of the Cox Automotive Industry Insights team, please contact us.