Then & now: NUMMI v. GM-Honda EV alliance
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Please respond to peer’s post: Then & now: NUMMI v. GM-Honda EV alliance
NUMMI stands for New United Motor Manufacturing Inc. and was a factory that was run by both Toyota and GM (Langfitt, 2010). The plant was originally owned by GM and was their worst factory in the company and they even shut it down 1982, but Toyota was facing import hardships into the United States, so it partnered with GM to reopen the Fremont, California plant so avoid the tariffs (Langfitt, 2010). Toyota taught GM the Toyota way of working and GM allowed Toyota to build vehicles in its factory so both sides initially benefited from the partnership (Langfitt, 2010). The partnership and factory ended in 2010 due to GM’s bankruptcy and Toyota didn’t want to continue alone (Langfitt, 2010).
GM and Honda have agreed to a partnership that would allow them to develop lower-priced electric vehicles in a bid to beat Tesla in sales (Klayman, 2022). Honda owns a stake in GM’s Cruise (self-driving car subsidiary), and they will be co-developing autonomous EV’s (Klayman, 2022). The two companies also have joint venture in hydrogen fuel-cell systems that is being developed and produced in Michigan (Klayman, 2022). The deal is to ensure affordable EVs are built and hope to eventually outpace Tesla (Klayman, 2022).
BBA vs. Ford Mahindra
BBA is a joint venture between BMW and Brilliance Automotive Group Holdings (Reuters Staff, 2018). The deal is set to expand BMW Brilliance Automotive’s (BBA) production capacity to 520,000 BMW vehicles in China across two of its plants (Reuters Staff, 2018). This new deal will make it BMW’s largest production sites in the world (Reuters Staff, 2018). These two Chinese sites will also produce BMW’s electric vehicles and export it to other markets around the world (Reuters Staff, 2018).
Ford Motor and Mahindra & Mahindra had originally agreed to a joint venture that would have allowed them to develop 3 new SUV models and share suppliers, powertrains, and technology information (Reuters, 2021). This deal would have allowed Ford to launch new vehicles faster and cheaper than ever before in the Indian market in which they only have 2% of market share (Reuters, 2021). This deal ultimately fell through, and Ford is looking for a new partner in the Indian market (Reuters, 2021).
ViaVan was created in 2017 between Via and Mercedes-Benz Vans. Via is a developer of dynamic share ride technology, and Mercedes-Benz Vas, is the leading manufacturer of passenger and cargo vans (PRNewsWire, 2018). The idea is that customers can match other customers heading in their way and sharing the cost of the trip while riding in a professionally chauffeured vehicle (PRNewsWire, 2018). The technology allows customers to select their pickup and drop off location and the technology will direct them to a centralized location that will allow for the most efficient shared rides without lengthy detours that take customers out of their way (PRNewsWire, 2018).
MTM stands for Mazda Toyota Manufacturing. This partnership gave Toyota ownership (minority) stakes in Mazda, and gives Mazda Toyota’s local market knowledge and reputation for reliability (Lyon, 2022). They have a joint plant in Alabama which will also include electric vehicle production in the future (Lyon, 2022). Mazda is hoping that this relationship will allow them to increase their U.S. sales by 30% over the next 3-4 years (Lyon, 2022). Toyota is hoping this new relationship will also give them more innovative ideas as they are always looking to change things and create new efficiencies (Lyon, 2022).
AutoLatina v Ford VW Self-Driving
AutoLatina was a joint venture between Ford and VW due to a recession that occurred in Latin America in the 1980s (Almeida, 2020). VW was the best-selling automaker at that time but they agreed to partner with Ford to cut costs (Almeida, 2020). The venture was started in 1987 and started with engine swaps between the two companies (Almeida, 2020). They shared a lot of success as they both released a car within a year of each other: Verona (1989) and Apollo (1990) (Almeida, 2020). This led to more shared cars, but tensions grew at company headquarters (Almeida, 2020). The venture ended in 1995 (Almeida, 2020).
Ford Motors and Volkswagen have once again agreed to a joint venture. They will be developing autonomous vehicle technology (Argo AI) together and integrating the system into their own respective vehicles (Tobin, 2019). Ford and VW will share an equal stake in Argo AI which will allow them to remain independent of each other and remain competitive in the marketplace (Tobin, 2019). This deal, however, will allow them to deliver unmatched capabilities (Tobin, 2019). Ford and VW will have the capability of being at the forefront of self-driving cars and allow them even greater market share around the globe (Tobin, 2019).
Was I aware?
It is amazing to see how many partnerships there are within the same industry. I never would have guessed that these companies would ever agree to joint ventures as they are rivals within the industry. The only company that made sense for a partnership was ViaVan as they are in two different sectors so both companies benefit from the partnership. For me, the Ford and VW joint venture in Argo AI makes no sense as they will still have to compete for market share. This forum definitely opened my eyes to the fact that partnerships can happen between competitors because both companies can benefit from it.
Almeida, D. (2021, December 25). Ford and VW’s on-and-off fling. Retrieved from https://danilloalmeida.medium.com/ford-and-volkswagen-fling-new-chapter-77d88ddc1014
Klayman, B. (2022, April 5). GM and Honda to produce ‘attainable EVs’ in bid to surpass Tesla sales. Retrieved from https://www.reuters.com/business/autos-transportation/gm-honda-expand-partnership-around-electric-vehicles-2022-04-05/
Langfitt, F. (2010, March 26). The end of the line for GM-Toyota joint venture. Retrieved from https://www.npr.org/templates/story/story.php?storyId=125229157
Lyon, P. (2022, March 30). Retrieved from https://www.forbes.com/sites/peterlyon/2022/03/30/mazda-plans-to-boost-us-sales-thanks-to-tie-up-with-toyota/?sh=673e820d2a34
Reuters Staff. (2018, July 9). BMW, brilliance JV to expand capacity to 520,000 vehicles in 2019. Retrieved from https://www.reuters.com/article/germany-china-bmw-brilliance-china/bmw-brilliance-jv-to-expand-capacity-to-520000-vehicles-in-2019-idUKF9N1I6022
Reuters. (n.d.). Ford and Mahindra to end collaboration on all projects in India. Retrieved from https://www.cnbc.com/2021/04/01/ford-and-mahindra-to-end-collaboration-on-all-projects-in-india.html
Tobin, A. (2019, July 14). Ford And Volkswagen Enter Self-Driving Car Joint Venture. Retrieved from https://www.forbes.com/sites/annatobin/2019/07/14/ford-and-volkswagen-enter-self-driving-car-joint-venture/?sh=12b6ce27cc88
ViaVan. (2018, April 4). ViaVan launches revolutionary shared ride service in London. Retrieved from https://www.prnewswire.com/news-releases/viavan-launches-revolutionary-shared-ride-service-in-london-300624452.html