General Motors (GM) said on Wednesday that it will join forces with Japanese carmaker Honda to develop autonomous vehicles as the race to market self-driving cars heats up.

"This is the logical next step in General Motors and Honda's relationship, given our joint work on electric vehicles, and our close integration with Cruise," GM Chairman and CEO Mary Barra said in a statement.

Honda will contribute approximately two billion US dollars over 12 years to the joint project, together with a 750 million US dollars equity investment in Cruise, GM's self-driving vehicle unit.

GM has already been building test versions of its Cruise AV, a driverless car based on the Chevrolet Bolt EV, but without a steering wheel or pedals.

"We will complement their strengths through our expertise in space efficiency and design to develop the most desirable and effective shared autonomous vehicle," said Honda's Executive Vice President Seiji Kuraishi.