GM and Honda’s deepening collaboration reinforces industry trend in wake of pandemic

Following the news that General Motors and Honda are to deepen their collaboration in North America to share common vehicle platforms and technologies in a strategic alliance;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view: 

“The news from GM and Honda is not all that surprising. It builds on an existing agreement, but this deepening collaboration ramps it up further in the wake of a pandemic crisis that has hurt both companies and put the spotlight on cost savings.

“They can save huge sums on development costs for advanced technologies and also leverage their greater combined scale for procurement savings. GM has a ready-made flexible electric vehicle platform that Honda can utilise, generating much needed scale to lower unit costs – a win-win for both.

“Other companies are also engaging in similar alliances, including cross-town rival Ford which has a strategic alliance with Volkswagen.

“We can expect to see more such announcements as we come out of the COVID-19 crisis and automotive companies survey a much changed business landscape. Selective collaborations such as this are a good way to contain costs, especially in areas that entail expensive investment.”

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