The Renault–GM alliance might not be as big as people suspect. Car companies already source a great deal of their components from the same place, and a tie-up would mean lower pricing for Renault and GM. The ofﬁcial line might not be too far from the truth this time.
Sure, we hear big names like Kirk Kerkorian, and I know he has grand visions for cooperation. Somehow, I still believe GM will drag its heels because of a Johnny Foreigner syndrome, and Renault will be held back by French politicians.
Any real merger could begin here, but I don’t think it will unfold the way things did with Daimler-Benz AG and Chrysler Corp. last decade. There, we were confronted with one group willing to spend, and another group ﬂexible enough to say yes.
I don’t think the same factors exist this time, with GM preferring to look at streamlining its operations globally rather than join an alliance, at least not beyond component sourcing and some shared platforms. If anything, this will rejuvenate Bob Lutz’s efforts to bring GM units more closely together.
Del.icio.us tags: GM Renault Nissan alliance merger Posted by Jack Yan, 06:33
hiya jack yan!
the queer chef and comment whore pimped me here. nice blog.
Thanks, R*yan! Charles’s blog is wonderful and it’s a great way to meet people.
Hi Jack. I knew you were about to take up this issue any day around since it's made headlines. While I coincide with what you have concerned, I also get this fuss that where's the end of it really ? Is the whole global automobile industry is anyway going to be formed into one single conglomerate ? Or there'll be a four way tug directing each one to GM or Ford Or DaimlerChrysler or Toyota [reckoning a Toyota-Honda merger] ? So, there'll be a vey few platforms and a very few competition now. All in the name of say, survival or streamlining or restructuring or the other sorts of gains. I wonder, how would they take care of the imminent market cannibalization. Isn't the very thread of individuality [or for that matter, identity] and culture also lost ?
I think the only benefit to such a merger would be retain the number one position over Toyota in global sales. To manage three companies with three cultures and so many locations would be a nightmare and the increased economies of scale would be insignificant. As a former GM employee, I hope this doesn't go through.
Atul, I agree. The cultures will not work out, though in fairness Renault–Nissan has worked, and Renault has learned from its alliance with AMC. However, I doubt GM is easy to shift, Bob Lutz or Carlos Ghosn. Ghosn will have to ﬁght a lot of battles to get his way, and while he will, it’ll be frustrating.Post a Comment
Rohan, consolidation is expected in mature industries, so I would not be surprised if we see more mergers. We have seen far stranger alliances in the past, but I personally think Honda will go offshore for one. Honda–BMW does not sound too daft to me. Ford–Fiat could make some sense.
Cannibalization would be avoided through branding, as we’ll see with the nuova Fiat 500 and the next Ford Ka: if anything, Ford has been particularly good on managing its brand portfolio, even if it has red ink from Jaguar and Land Rover.
Links to this post:
NoteEntries from 2006 to the end of 2009 were done on the Blogger service. As of January 1, 2010, this blog has shifted to a Wordpress installation, with the latest posts here.
With Blogger ceasing to support FTP publishing on May 1, I have decided to turn these older pages in to an archive, so you will no longer be able to enter comments. However, you can comment on entries posted after January 1, 2010.
Individual JY&A and Medinge Group blogs
DonateIf you wish to help with my hosting costs, please feel free to donate.
Copyright ©200210 by Jack Yan & Associates. All rights reserved. Photograph of Jack Yan by Chelfyn Baxter.