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GM, Honda announce North America car alliance

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Sep 04, 2020 - 11:29 AM

NEW YORK — General Motors and Honda announced Thursday they were establishing a strategic alliance in North America to share vehicle platforms and development costs.

The venture builds on existing partnerships on electric cars and fuel cell systems and comes as automakers face pressure to develop autonomous driving and other envelope-pushing technologies amid uncertain vehicle demand in the wake of the economic downturn due to the coronavirus.

A joint press release said the venture would save money from shared vehicle platforms and propulsion systems, joint purchasing and shared research and development spending.

GM’s US rival Ford has teamed up with German giant Volkswagen to jointly develop electric and self-driving vehicles, and a pending merger between Fiat Chrysler and Peugeot also aims to hold costs down.

Morningstar analyst David Whiston said there few details offered on the extent of the financial savings to either firm, but that “the alliance can make sense” if Honda makes headway in some of the truck segments where it lags and GM benefits from Honda’s expertise with smaller cars.

“We see the agreement as a low-risk and potentially high-reward move for both firms, and their prior history lowers the risk of tension and poor cooperation,” Whiston said.

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