Japan's Hitachi Automotive Systems and Honda Motor Co. signed a formal agreement to form a 5 billion yen ($44 million) joint venture to develop engines for electric vehicles.
Plans for the venture, known as Hitachi Automotive Electric Motor Systems, were unveiled earlier this year. The new company will be run under President Noboru Yamaguchi and located in the Ibaraki Prefecture in Japan.
Hitachi Automotive Electric Motor Systems will construct motors for gasoline-electric hybrids, plug-in hybrids and battery-electric cars, and will have sales and manufacturing functions in the U.S. and China in addition to Japan, Reuters reported when the joint venture was first unveiled in February.
The new company will respond to the growing global demand from automakers for electric vehicle motors by developing competitive motors that combine the expertise of the two companies, according to a release.
"Producing motors is capital intensive, so rather than just manufacturing them for our own purposes, we would like to produce in large volumes with the possibility of supplying a variety of customers," Honda CEO Takahiro Hachigo told reporters at a news briefing in February.
"In pairing up with Hitachi, we're hoping to tap into its expertise in volume production."
The JV will be 51 percent owned by Hitachi Automotive Systems and 49 percent held by Honda.