HondaMotor's (HMC) - Get Report interest in tying up with Alphabet's (GOOGL) - Get Report self-driving unit is yet another sign that even the leaders of Japan's signature industry are no longer above looking abroad to keep up with the fast-paced innovations in generational-shifting technologies.
The maker of the Civic and Jazz cars said late Thursday it is in talks with Waymo, a unit of the Silicon Valley giant, on joint research and development in the area of self-driving cars. Under this tie-up, Honda would install Waymo's self-driving products such as sensors, software and automotive computers into it cars, and test them together on public roads in the U.S.
The alliance would not only be a step forward for Honda, which already had goals to make its own advanced driver-assistive system -- Sensing and AcuraWatch -- into practical use by 2020, it also signifies how even the leaders of the Japanese auto industry, which a generation ago had dominated global peers, are now willing to swallow their pride and turn not just outside of the country but to start-ups with just a wink of history compared to their own.
Even Japan's biggest company ToyotaMotor (TM) - Get Report , which has been widely perceived as slow-moving in committing to next-generation technologies, has turned overseas and to new players. In October, the world's largest automaker, alongside BMW (BAMXY) and others, invested in Palo Alto, Calif.-based Nauto, a start-up which makes artificial intelligence-installed cameras and cloud systems that identifies dangers and alerts drivers.
Meanwhile, the Renault-Nissan Alliance, a strategic partnership between Nissan Motor (NSANY) and Renault (RNLSY) , in September signed an agreement with Microsoft (MSFT) - Get Report to co-develop connected services for cars by Microsoft Azure. The Renault-Nissan Alliance is aiming to launch more than 10 models with autonomous driving technology by 2020.
All this begs the question about what the sentiment for innovation is within Japan. While the country has historically been well-known for meticulous technological standards, it faces a stubborn obstacle for ground-breaking developments. Part of this may be explained by poor support for early-stage investment, as well as the overwhelming existence of old-time conglomerates that has not only dominated but perhaps also choked the country's corporate landscape.
The 35-year old SoftBank (SFTBY) , a relatively young player in Japan, has famously ventured into the semiconductor industry by acquiring U.K. chip designer ARMHoldings to ride the wave of Internet of Things. The company has also been an active participant in the automotive business, again turning outside of Japan.
SoftBank has invested in ride-hailing companies such as China's DidiChuxing, Singapore's Grab, and India's Ola. CEO Masayoshi Son has even expressed his regret in turning down Travis Kalanick's early offer to invest in Uber, now a synonym for ride-hailing businesses.
But Son is still well in the game as he follows the cue of other global automakers such as Volkswagen (VLKAY) , which this month unveiled a new mobility service Moia, partnering with Israeli ride-hailing affiliate Gett, or Daimler (DDAIY) , which has invested in a taxi-hailing app. The two German companies have also been actively participating in the development of autonomous driving technologies.
It may just be that the world of technology had abandoned the idea of geographical borders long before we even noticed, and that Honda's move, in the larger scheme of things is really, no big deal.
The ultimate verdict, however, will fall with who takes the lion's share of profits.
(Alphabet is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here).