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Honda Motor Co. has agreed with U.S. General Motors Corp. to form a cooperative partnership which includes the mutual supply of engines, Honda President Hiroyuki Yoshino announced Tuesday.
At the same time, Yoshino stressed that the agreement framework does not include capital partnership with GM and that Honda will maintain its independence without forming capital tieups with any other automakers.
Honda will supply V6 ultra-low-emission vehicle engines and automatic transmissions for a GM marketed model in the North American market.
However, the two automakers have yet to decide on the details of the agreement, including the number of engines to be supplied, according to the Japanese automaker.
Similarly, Isuzu Motors Ltd., a Japanese truck and bus manufacturer affiliated with GM, will supply diesel engines to Honda for the European market.
Isuzu Motors has expertise in diesel engine technology and, in contrast to the Japanese market where diesel engines are mostly for commercial vehicles, there is strong demand for domestic-use cars with diesel engines in the European market.
Under the agreement framework, Honda and GM will explore future cooperative relationships in the fields of advanced technology and other mutually beneficial areas such as the recycling business in Europe and auto parts procurement, Yoshino said.
As a reason for forming the ties with GM, the largest automaker in the world, Yoshi no cited that the proposed cooperation will help Honda gain access to up-to-date information on industry trends, namely the next-generation fuel-cell vehicles.
“In the process of doing (engine) business with GM, we will be able to get details on the future direction (of the auto industry). This includes standardization of fuel-cell vehicles,” Yoshino said.
Meanwhile, Honda said it will invest 15 billion yen by 2003 to raise the efficiency of domestic production facilities for power trains.
The company will also expand overseas production of engines from the 1.23 million units estimated for 1999 to 1.8 million units in 2003, increasing the total production capacity of engines to 3 million units in 2003.

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