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Honda Motor President Takahiro Hachigo, right, stands with Hitachi Automotive Systems President Hideaki Seki.
Business

Honda bets on tie-up to catch up in e-vehicle race

Hitachi Automotive known for technological edge in motors

TOKYO -- Honda Motor, a latecomer to the electric-vehicle race, will team with Hitachi Automotive Systems in hopes of playing catch-up.

The Japanese automaker and the Hitachi unit said Tuesday they will establish a joint venture in July to develop, produce and sell motors for electric vehicles and gasoline-electric hybrids. The new company will be based in Ibaraki Prefecture and capitalized at 5 billion yen ($44.5 million). Hitachi Automotive will take a 51% interest, while Honda will have 49%.

Production facilities are to be built in the U.S. and China. The plan apparently involves selling products to major automakers such as Ford Motor and General Motors with the goal of cutting costs by pursuing economies of scale.

"Partnering with Hitachi Automotive will allow us to take stabs at new technologies and bring them to other automakers, achieving scale," Honda President Takahiro Hachigo told reporters Tuesday.

Honda trails many of its peers on electric vehicles. Yet the company aims to have such models account for two-thirds of automobile sales by 2030, Hachigo said, calling better motors essential in accelerating the shift to electric. Though Honda will continue making many of its own motors after partnering with Hitachi, the automaker will rely on the joint venture for part of its supply.

Reaching out

Hitachi Automotive brings substantial expertise to the table. The manufacturer already supplies motors for GM's Chevrolet Volt electric vehicle, as well as for cars from Toyota Motor and Isuzu Motors. The joint venture will "set itself apart from the competition" by making motors "smaller, lighter and more powerful," Hitachi Automotive President Hideaki Seki said. The partners look to build the new company into a world-class motor supplier, meeting growing demand for the components as major automakers charge up electric-car production.

Other Hitachi Automotive technologies, from batteries to in-car information systems, could get a lift as well from the partnership with Honda, which produces around 5 million vehicles yearly.

Honda traditionally steers clear of the webs of alliances running through the auto industry, developing and producing much of its technology in-house, including motors. But as the auto business grows more complex, requiring advanced environmental and information technology in addition to basic parts, the company has grown aware of the limits to this strategy. The automaker increasingly works with peers and strikes partnerships across industry lines.

Honda teamed with GM in 2013 to research and develop fuel-cell vehicles, and in 2016 partnered with SoftBank Group in the artificial intelligence field. The automaker also is weighing a research partnership with Waymo, a Google affiliate developing self-driving vehicles.

(Nikkei)

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