Honda and Hitachi Automotive Systems have announced the signing of a Memorandum of Understanding (MoU) to establish a joint venture company for the development, manufacture and sales of motors for electric vehicles.
In a statement, the two companies said they will now will conduct formal discussions regarding the establishment of the new company. For Honda, the partnership helps its efforts to catch up with its rivals in electric vehicles, increasingly seen as a major automotive growth opportunity.
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The partnership aims to realise economies of scale by selling motors to other automakers also.
Hitachi Automotive Systems first started selling motors for electric vehicles in 1999 and sells to vehicle manufacturers in Japan and throughout the world.
In terms of electrification, Honda is best known for its hybrid car, the Insight, but the company says it is now focused on expanding its electric vehicle line-up.
The two companies signed the MoU with the aim of using the collaboration between a vehicle manufacturer and supplier to ‘generate technological synergy and economies of scale that will strengthen their competitive advantage and business foundation for the motors at the core of an electric vehicle system’.
Subsidiary operations of the new Japan-based joint venture are planned for the United States and China, each with manufacturing and sales functions. Together with the establishment of these operations, the new company will expand the global supply of motors – supplying other OEMs besides Honda.
Hitachi Automotive Systems stressed it will continue to promote its business operations by ‘maintaining the business relationships it has with vehicle manufacturers that receive their supply of motors from the company’.
Honda will also continue to focus on the global promotion of electric vehicles by using motors from the new company as well as the motors it currently manufactures itself in Japan.
The signing of the definitive agreement for the establishment of the joint venture company is planned for the end of March 2017.
Honda recently announced – with General Motors – the establishment of the auto industry’s first manufacturing joint venture to mass produce an advanced hydrogen fuel cell system that will be used in future products from each company.
According to projections published by just-auto’s research arm, QUBE, the production of full electric vehicles in North America will rise from around 140,000 units in 2017 to over half a million vehicles a year by 2021.
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