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> Why would Honda, a company who's brand is "highly reliable and competent engineering" sign a strategic partnership with GM A major reason for Honda's laggard
by alephnerd 2y ago
> Why would Honda, a company who's brand is "highly reliable and competent engineering" sign a strategic partnership with GM
A major reason for Honda's laggardness is because it is much smaller compared to other Japanese competitors, and lacks the horizontal integration that other Japanese competitors have.
In Japan, the entire economy is basically directly or indirectly owned by Mitsubishi Group, Mitsui Group, Fuyo Group, and Sumimoto Group. These are conglomerates that are so big that they de facto own entire districts and cities
Honda is nowhere near the size of those Keiretsus.
Toyota Motors (Toyota Group + Fuyo Group), Mitsubishi Motors (Mitsubishi Group), Nissan Motors (Fuyo Group + Renault), and Suzuki Motors (Mitsubishi Group + Toyota Group) are massive Keiretsus that are able to make strategic partnerships or have ownership stakes in other players like Idemetsu Kosan (Toyota), Panasonic (Toyota), AGC (Mitsubishi), TDK (Mitsubishi), CATL (TDK/Mitsubishi), Hitachi (Nissan/Fuyo), AESC (Nissan/Fuyo), NEC (Sumimoto), etc that puts players like Honda on the backfoot.
Nissan at least made a partnership with NEC (Sumimoto Group) and AESC (formerly part of Nissan Group) for battery R&D much earlier than other players in Japan (partially thanks to help from Renault Group).
Honda was just too small of a player to make strategic partnerships or gain ownership stakes in the battery supply chain, and by partnering with GM they are able to indirectly piggyback off of Samsung SDI (who are the Battery manufacturer for GM and now Honda, and were the tech partner for BYD back when it was getting started as a South Korean-Chinese JV).
- taylodl 2y agoThanks for this insight!
- alephnerd 2y agoYep! That's why Honda decided relatively early to expand abroad. It's basically an American (cars), Chinese (cars), and Indian (motorcycles and cars) automotive company for all intents and purposes, but it's China and India businesses are rapidly falling behind due to lack of technical inputs due to the reasons mentioned above.