Honda Motor Co will steer clear of cooperating with rival automakers as it seeks to boost its presence in Asia, defying a resurgent trend towards tie-ups in the industry, a top executive said.
Automakers from Volkswagen AG and Suzuki Motor Corp to Renault-Nissan and Daimler AG are exploring ways to share vehicle underpinnings and components to lower R&D spending as competition intensifies with the spread of cheaper and more fuel-efficient cars.
But Fumihiko Ike, head of Honda's Asia & Oceania operations, said Japan's No.2 carmaker would shun such partnerships after its past experience with a short-lived capital tie-up with Britain's Rover in the 1990s and an engine supply deal with General Motors in the past decade.
"Pursuing bigger volumes is certainly one way of lowering costs," he told a small group of reporters on Tuesday.
"But in reality making cars isn't that simple. It's very difficult for two companies to work together towards a common goal. On paper you might end up with the volumes, but in other ways you get huge inefficiencies," he said.
Ike, formerly Honda's chief financial officer, said working speedily alone could be more beneficial than gaining economies of scale through a tie-up. Developing key technologies in-house was expensive but also desirable, he said, as it enables carmakers to work in conjunction with suppliers to lower parts costs.
"The key now is figuring out how to efficiently develop and produce cars. And if the company becomes too big, efficiencies will also fall," he said.
HYUNDAI A BENCHMARK FOR SMALL CAR
Ike's comments came as Nissan was reportedly in talks with Daimler to procure large engines from the maker of Mercedes-Benz cars, and to supply the German automaker with electric cars and batteries.
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