Honda will invest $ 2 billion in GM's self-driving cruiser unit

On Wednesday, October 3, two competitors from the automotive industry teamed up to usher in the era of autonomous vehicles.

Cruise, an automotive subsidiary of General Motors Co. (GM), announced that Honda Motor Co. (HMC) would invest $ 2 billion over 12 years to fund and develop a stand-alone vehicle specifically designed for Cruise. Honda will also invest $ 750 million in Cruise, bringing the total commitment to $ 2.75 billion.

Cruise, GM's arm-in-arm, is now valued at $ 14.6 billion as a result of a separate investment recently announced by SoftBank.

"This is the next logical step in the relationship between General Motors and Honda, given our joint work on electric vehicles and our close integration with Cruise," said Mary Barra, president and chief executive officer of General Motors. . "Together, we can provide Cruise with the world's best design, engineering and manufacturing capabilities, and a global reach to position them as a leader in autonomous vehicle technology, while deploying autonomous vehicles in large scale."

GM shares rose 2.6% to $ 34.17 at 10 am New York time, while Honda's US deposit revenues fell 3.4% to settle at 29 , $ 41.

GM has begun testing self-driving vehicles in a few cities, including San Francisco, and plans to launch a self-driving taxi service in 2019.

The automaker acquired Cruise in 2016 for $ 581 million in cash, but the overall value of the transaction was close to $ 1 billion with incentives for "key talent," Bloomberg said.

– Anders Keitz contributed to the report.

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