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GM and Honda plan extensive alliance to share platforms, engines

The automakers have signed a memorandum of understanding as a step toward a massive North American alliance.

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General Motors/Honda

The latest two automakers to draw closer to one another.

General Motors

The times, they are a-changing. On Thursday, General Motors and Honda announced that they have signed a memorandum of understanding to create a strategic alliance covering North America. The two companies said they plan to explore combined efforts to cover vehicle segments, share platforms and even powertrains -- internal combustion and alternative fuel.

The proposal imagines GM and Honda standing united to cover "a variety of segments in North America" with discussions surrounding joint development of vehicles starting immediately. The first pieces of joint GM-Honda engineering work are scheduled for early 2021, according to the automakers. As the two begin to share development of vehicle platforms and technologies, the companies say they'll achieve massive savings -- the automakers even plan to jointly purchase from suppliers and will investigate "potential manufacturing efficiencies and other collaboration efforts."

The alliance is not a full-scale merger like Fiat Chrysler Automobiles and France's PSA Group plan. But it's another sign the auto industry forecasts the need to further collaborate for the future. Ford and Volkswagen have agreed to their own alliance and Nissan has long worked with Renault, with Mitsubishi joining the fold in the last decade. Toyota owns stakes in Mazda and Subaru. This very situation is something the late FCA CEO Sergio Marchionne predicted while he pushed for an FCA merger with a competitor -- even GM itself -- in the middle of the last decade.

The news follows reports the Japanese government eyed a Honda-Nissan merger in Japan. Both automakers declined to comment on the report at the time.

GM and Honda seem like unlikely partners, but the relationship between the US and Japanese automakers dates back two decades. More recently, the two expanded work together on fuel cell manufacturing in 2018 after establishing an alliance in 2013. Honda in 2018 also made a large investment into GM's Cruise Automation self-driving car operation. Earlier this year, the two companies agreed to jointly develop two new Honda EVs based on GM architecture with the US firm's Ultium battery technology and OnStar infotainment system. Future Hondas may also receive the OnStar platform as part of this proposed alliance.

Neither automaker provided a date to seal the deal, but GM and Honda plan to establish a joint committee with senior executives from both companies to govern the North American alliance.

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