This is a big, big partnership that could put the other market players on red alert

A lot of partnerships are arising these days. It’s not just automakers and tech companies, but also automakers and automakers. This time, it’s General Motors and Honda teaming up to take on the world with Autonomous Technology. General Motors and Cruise Automation announced collaboration with Japanese giant, Honda that will seek “large-scale deployment” of technology for autonomous vehicles.

It Looks Like Honda Has A Lot Of Faith In This Partnership

General Motors and Honda Collaborate On Autonomous Technology
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Since these are two of industry’s biggest names, you can imagine the investment that went into this deal - or maybe you can’t.

Honda alone will be investing $2 billion over the next 12 years! This is separate from the $750 million equity investment in Cruise Automation. That makes it a grand total of $2.75 billion.

This is one of the largest investments in the automation industry. Cruise Automation has investments from global giants like SoftBank as well, bringing its capital value to $14.6 billion.

Mary Barra, General Motors’ CEO, said “This is the logical next step in General Motors and Honda’s relationship, given our joint work on electric vehicles, and our close integration with Cruise,” also adding, “Together, we can provide Cruise with the world’s best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology – while they move to deploy self-driving vehicles at scale.”

Our Take

General Motors and Honda Collaborate On Autonomous Technology
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Partnerships are slowly becoming an integral part of the industry.

With the technology moving forward, automakers have realized that you cannot survive alone, so it’s better to collaborate and sow the seeds in a high-volume, then reap the fruits together. It’s not just the automakers, but also start-ups that believe in strategic alliances. In fact, Chinese automaker Geely went to the extent of saying that only two or three manufacturers would exist in the future; so collaborations are needed to survive.

Now, we are not sure if that "apocalypse" would happen, but at least technology is moving ahead at brisk speed because of these high-monetary partnerships. Do you think automakers and companies should collaborate this way and create some sort of a Cartel, or should they play alone even if it involves getting eaten off by the whales of the industry? Share your thoughts in the comments section below.

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Cruise and General Motors Co. (NYSE: GM) announced today that they have joined forces with Honda (TYO: 7267) to pursue the shared goal of transforming mobility through the large-scale deployment of autonomous vehicle technology.

Honda will work jointly with Cruise and General Motors to fund and develop a purpose-built autonomous vehicle for Cruise that can serve a wide variety of use cases and be manufactured at high volume for global deployment. In addition, Cruise, General Motors and Honda will explore global opportunities for commercial deployment of the Cruise network.

Honda will contribute approximately $2 billion over 12 years to these initiatives, which, together with a $750 million equity investment in Cruise, brings its total commitment to the project to $2.75 billion.

In addition to the recently announced SoftBank investments, this transaction brings the post-money valuation of Cruise to $14.6 billion.

“This is the logical next step in General Motors and Honda’s relationship, given our joint work on electric vehicles, and our close integration with Cruise,” said General Motors Chairman and CEO Mary Barra. “Together, we can provide Cruise with the world’s best design, engineering and manufacturing expertise, and global reach to establish them as the leader in autonomous vehicle technology – while they move to deploy self-driving vehicles at scale.”

“Honda chose to collaborate with Cruise and General Motors based on their leadership in autonomous and electric vehicle technology and our shared vision of a zero-emissions and zero-collision world,” said Honda Executive Vice President and Representative Director COO Seiji Kuraishi. “We will complement their strengths through our expertise in space efficiency and design to develop the most desirable and effective shared autonomous vehicle.”

“With the backing of General Motors, SoftBank and now Honda, Cruise is deeply resourced to accomplish our mission to safely deploy autonomous technology across the globe,” said Cruise CEO Kyle Vogt. “The Honda partnership paves the way for massive scale by bringing a beautiful, efficient, and purpose-built vehicle to our network of shared autonomous vehicles.”

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