General Motors (GM) - Get Report and Honda (HMC) - Get Report said Thursday they signed a non-binding memorandum of understanding toward establishing what the two automakers called "a North American automotive alliance."
Under the proposed alliance, the two companies would collaborate on a variety of segments in North America, intending to share common vehicle platforms, including both electrified and internal combustion propulsion systems.
Planning discussions will begin immediately, the companies said, with engineering work beginning in early 2021.
All facets of the alliance will be governed by a joint committee, comprising senior executives from both GM and Honda.
GM and Honda also plan to share R&D and engineering costs for select future co-developed vehicle and propulsion platforms.
The agreement builds on an earlier agreement General Motors and Honda signed in April to jointly develop two electric vehicles for Honda based on GM’s EV platform.
Based on that collaboration, GM and Honda will explore further co-development opportunities for future connected services, including GM’s OnStar and infotainment.
The relationship between the two companies began over 20 years ago, and includes collaborations on fuel cells, batteries and the Cruise Origin shared autonomous vehicle.
The Origin, which was introduced in January, is a six-passenger ride-sharing van that has no steering wheel or pedals and is designed to travel at highway speeds.
“This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources," GM President Mark Reuss said in a statement. "Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio."
Shares of GM were up slightly to $31.16, while Honda was up modestly to $25.53.