TOKYO – Honda has taken a step by sharing core factors with General Motors as a component of an expanded North American alliance, a reversal that reflects the automaker’s calculation error of its past “go-alone” strategy.
Announcing the strategic partnership on Thursday, the two automakers said they would share non-unusual vehicle platforms, add internal combustion propulsion systems, and buy portions together.Collaboration points to the main burden facing the industry as it sought to expand cleaner technologies.
“In particular, we can charge for functionality in The Largest Market in North America,” said Seiji Kuraishi, Honda’s executive vice president, explaining the reason for the merger.
Previously, the partnership between the two automakers targeted next-generation technologies such as autonomous driving and electric cars.The expanded partnership targets technologies that exist directly from the competition, such as gas cars and hybrid technology.
They will begin express collaborations, adding the standardization of vehicle platforms, starting next year.
Honda has long boasted fierce independence in its technical development.This radical replacement of leadership is due to an error of calculation by President Takahiro Hachigo.
When asked at a briefing on the effects in May on the car manufacturer’s plans to launch an “eyeless” self-driving car this year, Hachigo stumbled upon his answer: “I hope we can implement it within a year,” he said.
Honda had first planned an early start this summer for the car, which can be driven without human intervention in certain situations: the first autonomous “Level 3” style of a Japanese car manufacturer.
But progress towards the arrival of a self-driving vehicle has been slower than the company had anticipated.Honda announced in 2018 that it would invest three hundred billion yen ($2.83 million at existing rates) through 2030 in GM Cruise, the U.S. company’s autonomous vehicle unit.But GM Cruise, which planned to launch a robotaxi service last year, ended up postponing its plans.
“I don’t need to communicate about autonomous driving right now,” Hachigo told his relatives this summer, frustrated by the car manufacturer’s lack of technological progress.Honda also struggled to gain momentum in electric.He began marketing the Honda e, his first vehicle.mass-produced electric car, to European consumers last month.
But the company expects to sell only 1,000 models, which have a diversity of almost three hundred kilometers and are sold at a value of around 4.5 million yen, in its domestic market consistent with the year.He’s a leader in the box like Tesla.
Honda mainly makes its profits from four-wheeled vehicles, however, its only good fortune in recent years has been the N-Box mini-car introduced in Japan, and two-wheeled vehicles are vital for profit.
The sector, which also includes off-road cars and side-by-side cars, earned 285.6 billion yen in operating profits for the year through March 2020, approximately twice as much as the automotive sector.
The motorcycle business also recorded an operating profit ratio of 13.9% to 1.5% for automobiles.
Honda’s automotive industry in a desperate scenario before Hachigo took over in 2015.
In 2012, former President Takanobu Ito set out to promote 6 million televisions internationally as a component of a global expansion.He said the 2008 monetary crisis had caused him to repent of Honda’s dependence on the U.S. market, but that the new production apparatus added as a component of that strategy had a burden.
Hachigo has changed Ito’s expansion strategy to a profit-driven strategy.Excess production capacity was eliminated both at home and at the closure of the Sayama plant in Japan and the Swindon plant in the UK.
Since the beginning of this year, Hachigo has brought the scalpel to Honda’s studies and progression operations, a sacred domain since the days of corporate founder Soichiro Honda.
The parent company has brought the maximum of these transactions internally, with the exception of the parts of the automotive progression controlled through the subsidiary Honda R
“We’re too much into the department’s optimization concept,” Hachigo said, reflecting on the R settings.
Then he hit the coronavirus pandemic.
For a company that was suffering to locate an expansion domain, anything that could simply be the automaker until next-generation technologies come to life, the virus has slowed down.
Global sales of four-wheeled cars fell by about 40% in the quarter from April to June, with an operating loss of 195.8 billion yen.
Industry research companies expect demand for cars to fall by 20% by 2020.In this context, the automaker still had no option to expand its cooperation with GM.
By participating only in long-term technologies such as fuel cells and autonomous driving, corporations will expand to share critical parts such as engines and chassis to reduce costs.However, history does not chart a promising path.
Collaboration between auto brands rarely ends in success.Nissan Motor and Renault, for example, have taken two decades to put together purchases and align engines into force.Can Honda really achieve profitability by deepening its links with GM?
Sixth-year president Hachigo will strive for fast, tangible results.
Subscribe to our newsletters to get our stories right in your inbox.
You want an Array subscription..