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Blog Coverage Honda and Hitachi's Automotive Subsidiary Form a JV Company for Manufacturing Motors for Electric Vehicles

Upcoming AWS Coverage on Tata Motors

LONDON, UK / ACCESSWIRE / February 8, 2017 / Active Wall St. blog coverage looks at the headline from Honda Motor Co., Ltd. (NYSE: HMC) as the Company announced and Hitachi Automotive Systems, Ltd., the auto parts subsidiary of Hitachi Ltd., announced on February 07, 2017, that they had signed a Memorandum of Understanding (MoU), to form a Joint Venture Company (JVC) that will develop, manufacture, and sell motors used in electric vehicles. Incidentally, Hitachi is already an existing supplier for Honda for auto-components like engine and brake parts. Register with us now for your free membership and blog access at:

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One of Honda Motor's competitors within the Auto Manufacturers - Major space, Tata Motors Ltd. (NYSE: TTM), is estimated to report earnings on February 09, 2017. AWS will be initiating a research report on Tata Motors following the release of its next earnings results.

Today, AWS is promoting its blog coverage on HMC; touching on TTM. Get all of our free blog coverage and more by clicking on the links below:

http://www.activewallst.com/registration-3/?symbol=HMC

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About the JVC

Both Companies are thrashing out the finer details of the JVC and in the meanwhile based on the MoU signed by Honda and Hitachi Automotive the following plans have emerged. The JVC has not been named so far, however, it is planned to operate from Hitachinaka, Ibaraki Prefecture, which is north of Tokyo. The company will be completely focused on the development, manufacture, and sale of motors for electric vehicles as well as petrol hybrids, plug-in hybrids and battery-electric cars.

Hitachi Automotive will own 51% stake in the JVC and the remaining 49% stake will be owned by Honda. The JVC is expected to start operations with a capital of 5 billion yen (approximately $45 million). Apart from operations in Japan, the JVC will have sales and manufacturing functions both in the United States and China.

The JVC is expected to be established by July 2017. A definitive agreement is expected to be signed by both Companies by end of March 2017, when a clearer picture will emerge and final details for the JVC will be known.

Vision for the Future

Honda and Hitachi Automotive have been working on electric vehicles for quite a long time. Honda had launched its first hybrid car in 1999 and since then it has been looking to expanding its electric car line-up.

Hitachi Automotive first started selling motors for electric vehicles in 1999 and currently supplies them to Nissan Motor Co, Toyota, and General Motors. Given companies passion for greener cars and motors for such vehicles, the current MoU is a step in the right direction.

The JVC is also in-line with Honda's business plans wherein it aims for "new-energy cars" to account for two-thirds of its worldwide sales by 2030. Currently, the share of such vehicles is approximately 5% of Honda's total global sales. Honda does not have a fully electric car in its line-up, but it has plans to launch battery-powered and plug-in petrol hybrid versions of its Clarity fuel-cell vehicle later in 2017.

Given the global push for low-emission and environmentally friendly vehicles, both Companies expect that the demand for electric vehicles would increase in the near future. Honda being the car manufacturing Company and Hitachi Automotive being the auto component counterpart, both Companies would be at a huge competitive advantage with the formation of the JVC. Motor being at the core of any vehicle, the JVC will be at the forefront of the technology needed for electric vehicles. Apart from competitive and technological advancement, the JVC will result in technological synergies as well as savings from economies of scale. In the future, the JVC has plans to supply motors for not just Honda but also other electric car manufacturers globally.

Hitachi Automotive will use its network to promote and distribute the new motors while continuing to supply its existing clients. Honda will also concentrate on promoting electric cars by using the motors manufactured by the JVC as well as continue to use the motors that it currently manufactures in Japan.

Strategic partnerships with competitors booming in the automotive sector

The increasing interest in the green car segment and future opportunities herein has caught a number of automobile companies' attention. However, the rising costs of setting up a technologically advanced manufacturing facility have forced many car companies to seek partners to share the risk and capital costs. Toyota Motor and Suzuki Motor on February 06, 2017 joined hands to share technologies towards fuel efficient and low-emission cars. The partnership would cover IT, Research and Development for self-driving, and "greener" cars.

In January 2017, General Motors and Honda announced a joint venture to produce hydrogen fuel cells by 2020. The partnership aims at both Companies sharing their "intellectual property" to manufacture a cost-efficient commercial solution for fuel cell and hydrogen storage technology.

Stock Performance

On Tuesday, February 07, 2017, the stock closed the trading session at $31.38, climbing 1.65% from its previous closing price of $30.87. A total volume of 1.51 million shares have exchanged hands, which was higher than the 3-month average volume of 682.28 thousand shares. Honda Motor's stock price advanced 13.24% in the last three months, 7.39% in the past six months, and 21.39% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 7.50%. The stock is trading at a PE ratio of 16.67 and has a dividend yield of 2.49%.

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