Hitachi Automotive Systems, Ltd., and Honda Motor Co., Ltd., today announced the signing of a Memorandum of Understanding, aiming to establish a joint venture company for the development, manufacture and sales of motors for electric vehicles. The two companies now will conduct formal discussions regarding the establishment of the new company. The still-to-be-named company will be funded with 5 billion yen. It is expected to be formally established by July 2017 with Hitachi holding a 51% interest and Honda holding 49%.
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.
Since Hitachi Automotive Systems first started selling motors for electric vehicles in 1999, it has been refining its technological and product capabilities to develop high-output, lightweight and compact electric vehicle motors. The company has delivered a high volume of these motors to vehicle manufacturers in Japan and throughout the world, and has earned high praise throughout the industry for the performance of these products and its production technology.
Since 1999, when Honda launched its first hybrid car, Insight, the company has focused on expanding its electric vehicle line-up as it continues to enhance its technological and production capabilities with respect to the motors that form the core component of electric vehicles.
Going forward, with environmental conservation measures and regulations increasing on a global scale, the market for electric vehicles is expected to continue to grow. Based on this direction, the two companies signed the MoU with the aim of using the collaboration between a vehicle manufacturer and supplier to 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.
In parallel to the efforts of the new company, Hitachi Automotive Systems will continue to promote its business operations by maintaining the business relationships it has with vehicle manufacturers that receive their supply of motors from the company. Moreover, Honda will continue to focus on the global promotion of electric vehicles by using motors from the new company as well as the motors it currently manufactures itself in Japan.