Hitachi Automotive System and Honda Motor have announced the signing of a Memorandum of Understanding (MoU) aiming to establish a joint venture company for the development, manufacture and sales of motors for electric vehicles.

The collaboration aims 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.

Environmental conservation measures and regulations increasing on a global scale, the market for electric vehicles is expected to continue to grow, the companies said.

Subsidiary operations of the new Japan-based joint venture are planned for the US and 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.

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.

The joint venture, which has yet to be named, will be 51 per cent owned by Hitachi and will be based in Hitachinaka city, north of Tokyo.

The companies hope to establish the joint venture by July after signing the definitive agreement in March, a statement said. – TradeArabia News Service