Honda has announced a joint venture company for the development, manufacture and sales of motors for electric vehicles, with Hitachi Automotive Systems, Ltd. The new venture is yet to be named.

The two companies have signed a memorandum of understanding and now will conduct formal discussions regarding the establishment of the new company.  It is hoped the deal will generate technological synergy and economies of scale that will strengthen their competitive advantage and business foundation for the motors at the core of an electric vehicle system.The signing of the definitive agreement for the establishment of the joint venture company is planned for the end of March 2017.

Hitachi Automotive Systems entered the electric vehicles market in 1999. The company has delivered a high volume of these motors to vehicle manufacturers in Japan and throughout the world.  Similarly Honda launched its first hybrid car in 1999, and since then has focused on expanding its electric vehicle line-up.Subsidiary operations of the new Japan-based joint venture are planned for the United States and People’s Republic of China, each with manufacturing and sales functions.

Together with the establishment of these operations, the new company will expand the global supply of motors by creating a robust response to demand from Honda and other vehicle manufacturers.