Honda, Hitachi Automotive
to form EV motor joint venture
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[February 07, 2017]
By Naomi Tajitsu
(Reuters) - Honda Motor Co Ltd and Hitachi Ltd's auto parts subsidiary
plan to form a joint venture to develop, produce and sell motors for
electric vehicles (EV), joining forces to better compete in the highly
specialized "green" car segment.
Automakers are increasingly teaming up with parts suppliers to build
components for the fast-growing EV segment as a way to expand product
line-ups while containing high development costs.
"Producing motors is capital intensive, so rather than just
manufacturing them for our own purposes, we would like to produce in
large volumes with the possibility of supplying a variety of customers,"
Honda Chief Executive Officer Takahiro Hachigo told reporters at a news
briefing on Tuesday.
"In pairing up with Hitachi, we're hoping to tap into its expertise in
The venture will be established in July with an investment of 5 billion
yen ($44.69 million), and will be 51 percent owned by Hitachi Automotive
Systems Ltd and 49 percent held by Honda, the two companies said.
It will build motors to be used in petrol hybrids, plug-in hybrids and
battery-electric cars, and will have sales and manufacturing functions
in the United States and China in addition to Japan, they said.
Hitachi Automotive Systems is a wholly owned subsidiary of Hitachi Ltd
and longtime supplier of components including engine and brake parts to
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counts the alliance of Nissan Motor Co Ltd and Renault SA as its biggest client,
accounting for around one-third of annual sales. Other customers include Toyota
Motor Corp, Ford Motor Co and Volkswagen AG <VOWG_p.DE>.
tie-up highlights Honda's willingness to join with other industry players as it
competes to develop more lower-emission cars. It comes after Honda's
announcement last week that it was teaming up with General Motors Co to produce
hydrogen fuel cell power systems in the United States from around 2020.
"It's a reflection that a lot of the new technologies being developed for
automobiles are not cheap, so companies are finding partners that they can share
the burden with to reduce their risk," said Janet Lewis, managing director of
equity research at Macquarie Capital Securities Japan.
"Nobody knows exactly where the industry is going to go, so everybody has to
have a variety of solutions. It's a way of preparing for the unknown."
The latest joint ventures by Japan's third-biggest automaker are part of its
strategy for new-energy cars to comprise two-thirds of its vehicle line-up by
2030 from around 5 percent now.
Honda is planning to launch battery-powered and plug-in petrol hybrid versions
of its Clarity fuel-cell vehicle later this year. It does not currently market a
battery-electric vehicle after discontinuing a limited production electric
version of its Fit mini MPV model in 2014.
($1 = 111.8700 yen)
(Reporting by Naomi Tajitsu and Taiga Uranaka; Editing by Christopher Cushing)
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