The idea of developing a digital self-driving car has been around for quite some time now. Recently, Honda and General Motors announced that they will be partnering to quicken the development of self-driving car and release it by 2019 (Davies, 2018). Honda is expected to invest $2billion in the next decade, in the partnership with GM, to see Cruise come to completion (Davies, 2018). The two companies will enjoy mutual benefits. Honda will tap into the idea having spent less effort and time, while GM and Cruise will tap into the engineering experience of Honda, and especially concerning interior design.
It is a good idea for Honda to partner up with competition. Firstly, research on self-driving automobile is expensive. In that sense, partnering up is recommended as the two companies will share costs. At the moment, Cruise is hiring engineers in their numbers, in order to form a talent pool that will enable it launch the self-driver car by 2019 (Davies, 2018). For that reason, the new entrant, Honda, is a major boost. According to GM President Dan Ammann, the task of coming up with an effective self-drive car is massive, and no company can do it alone, unless partnership is formed (Davies, 2018). In the same vein, Honda saw the partnership as a good idea, based on their leadership in electric and autonomous vehicle technology, and the two companies share a vision of producing vehicles with zero emissions. According to Honda CEO, they will strive to complement the GM strengths, through their expertise in design and space efficiency (Davies, 2018).
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Although the government can intervene in the partnership, it should not be to prevent it from happening. If any case, the authority should intervene to ensure that the partnership is in the best interest of the society. According to GM executive vice president Mark Reuss, the development of self-drive car is towards the realization of sustainable society. In the same vein, with the current climate changes being witnessed across the globe due to carbon emissions, it is the dream of every government to come up with automobiles that emit zero carbon. The fear that the two companies will use the partnership to collude in the broader automobile market should not be there because as it stands, the project is work in progress, and there is still no ready market for the digital vehicles.
The move says a lot about competitive dynamics in the automobile industry. Firstly, the partnership will ensure resources are brought together and as such, the success of the new technology will be fastened as opposed to when only one company is working on it. The partnership will bring competition in the industry as big companies such as Toyota have already collaborated on similar project to produce self-driving vehicles for Uber. In that sense, the two partnerships will compete in bringing to the market consumer and commercial vehicles with best technology.
Reference
Davies, A. (2018). Honda's Helping GM on Its Quest to Deliver Self-Driving Cars. Retrieved from <https://www.wired.com/story/honda-gm-cruise-self-driving-cars/>
