The days of a single company filling every niche in the auto market are long gone: Ford’s Premier Auto Group has been disassembled, while GM has cut its ties with several automakers while trimming down to just four brands in the U.S. Instead, companies are seeking partnerships that allow horizontal structuring, using the same parts and engineering nearly unchanged across multiple lines. As Renault-Nissan CEO Carlos Ghosn put it, “Ours is an industry of scale, and the minimum volume necessary to achieve competitive economies of scale keeps going up.” The result will be new cars that look and feel different while sharing underlying technology.
This merger has already done more for both companies than the decade-long Daimler Chrysler partnership. With one company strong on small cars and the other strong on large cars and trucks, they’ve been able to merge product lines to provide more offerings here and abroad. Although a few badge-engineered cars filled in Lancia’s lineup as soon as the merger was complete, no one would guess that the new Dodge Dart is based on the Alfa Romeo’s Guilietta. Chrysler’s partnership with Mitsubishi and Hyundai ended shortly after the merger, while new partnerships with India’s Tata and China’s Guangzhou should help the company expand in Asia.
Once part-owned by GM, the automaker partnered up with Volkswagen in 2009. This relationship immediately ran into problems, with VW refusing to release technology to Suzuki, and Suzuki sourcing diesel engines from Fiat instead of VW. Both companies have filed lawsuits, but it will probably be next year before these cases are settled. Their current agreement allows VW to buy more Suzuki stock, giving them the option of a hostile takeover.
Toyota and Subaru
The relationship between Toyota and Subaru started back in 2005, but aside from building Camrys at Subaru’s Ohio plant, the partnership has only recently been paying dividends. The BRZ/FR-S/GT-86 sports car has been universally praised, while access to Toyota’s technology allowed Subaru to prepare their own hybrid while having capital left over to develop a diesel engine.
Now that Mazda is a separate entity from Ford, they’re scrambling to find a new partner to help with development. After posting their biggest loss in 11 years, they’re under pressure to sell assets like their holdings in the Hiroshima Toyo Carp baseball team. There are rumors that they’re negotiating with Fiat.
Spyker’s original plan for Saab was to provide the engineering experience while getting a Chinese partner on board to handle manufacturing. However, former partner GM has leveraged Saab’s use of their patents to prevent any sale to Chinese automakers. Saab Parts was spun off from the main company, and will continue to provide support for current Saab owners. It was recently revealed that Saab Cars’ debt is about three times as much as its total assets, production of new cars is unlikely.
Parent company Proton has been hemorrhaging money, and is looking to sell off the British automaker to raise cash. By itself, the company is profitable thanks to its engineering arm, which has worked on everything from the Tesla Roadster to the Hennessey Venom GT. However, if its new line of luxury-focused cars don’t sell, they could end automobile production to concentrate on R & D.