2023 Author: Katelyn Chandter | [email protected]. Last modified: 2023-05-21 13:08
Big business weddings and divorces. Relationships of varying degrees of closeness have long been established between the companies.
It will be a revelation for most motorists to find out that, say, Chevrolet Lacetti and Suzuki Forenza, Daewoo Lacetti, Daewoo Nubira and Chevrolet Optra are one and the same car. The thing is that family ties of varying degrees of closeness have long been established between global companies.
Alexander Agibalov and Igor Morzharetto decided to figure out who belongs to whom.
TREND, HOWEVER …
The entire twentieth century, the auto industry went through a process of consolidation. At first, large companies successfully absorbed small ones. Then came the term of "giants" who tried to unite in order to penetrate new markets for themselves, as well as reduce the cost of creating new platforms, models, engines. The peak of the period of runaway consolidation was in the late 1980s and early 1990s. The merger of Daimler-Benz and Chrysler Corporation gave birth to Daimler-Chrysler - the world leader in the production of off-road vehicles. General Motors (GM) acquired the automobile division of the Swedish concern SAAB, and another American company, Ford, made a series of acquisitions - Land Rover, Jaguar, Volvo. Then the Americans were doing well, and they were actively looking for an outlet to the European markets. But in the last years of the last century - the beginning of the new century, the trend towards consolidation has slowed down.
There were several reasons for this. The main ones are falling demand for cars and tougher competition in the main markets (USA and Western Europe). As a result, producers' financial performance deteriorated and activity in the M&A markets decreased. We emphasize that American companies were the most active players in this market, and during this period they faced big problems: first of all, social payments in the US automotive industry reached astronomical amounts, and production, in principle, ceased to be profitable. Therefore, the process of enlargement since 2004 was replaced by the opposite trend. General Motors and Ford, in order to get out of the crisis or at least reduce losses, starting from 2005, basically sold their stakes in other companies. In 2005-2006 GM, trying to improve its financial position, sold its shares in Japanese companies: Fuji Heavy Industries (owns the Subaru brand) - 20.1%, Suzuki - 16.7, Isuzu - 7, nine%.
In addition, GM in 2006 parted with a controlling stake in its financial division GMAC Financial Services. True, there were acquisitions, but not as large-scale as at the end of the last century. After the bankruptcy of the South Korean company Daewoo, General Motors increased its stake in the GM DAT JV to a controlling stake, having bought in 2005 6, 3% of the shares. Now Daewoo models, designed and assembled in Korea, are marketed all over the world under the Chevrolet brand. From now on, GM is following a new strategy: to reduce production in North America, creating joint ventures in emerging markets, primarily in China, Russia and Ukraine. With heavy losses, he was forced to get rid of his premium assets and Ford.
In 2007, he sold the famous British brand Aston Martin, and earlier this year, Jaguar and Land Rover. Daimler-Chrysler moved in the same direction, which in 2005 sold 12.4% of Mitsubishi, and in 2007 Chrysler Holding, which owns the brands Chrysler, Dodge, Jeep, GEM (Global Electric Motorcarz). Having lost the Chrysler brand, the concern received a new name - Daimler. As American auto companies tackle the financial crisis, Germany's Volkswagen is not only maintaining its position as Europe's largest passenger car manufacturer, but also consolidating truck production on the continent, seeking to dominate the segment. In March 2008 VW increased its stake in Scania from 37.98 to 68. 60%. Prior to that, in 2006-2007. he acquired 29.9% of the German group MAN.
At the end of 2005, Porsche bought 18.65% of VW's shares and thereby prevented the takeover of the company by one of such giants as Daimler-Chrysler, BMW or Renault. In March 2007, Porsche increased its stake in Volkswagen to 30.9%, and a year later, Porsche's supervisory board approved the decision to increase the company's stake in VW to a controlling stake. This became possible after the EU Supreme Court overturned the German "Volkswagen Law", which limited the vote of any shareholder to 20%, regardless of the number of shares. The most recent of the significant acquisitions is the purchase by the Renault concern of a 25% stake in the largest Russian manufacturer AVTOVAZ. In the future, the French have the opportunity to increase their share of shares to a controlling stake.
VOICE FROM THE EAST
Against the background of the general fever in the global automotive industry, there is a gradual strengthening of positions and the consolidation of automakers from emerging markets. They are increasingly making attempts to reach the level of global manufacturers by purchasing well-known brands. So the Chinese "Nanjing Otomobile" (NAC) in 2005 bought the English company "GM-Rover", at the beginning of 2008 the Indian concern "Tata" acquired the English brands "Jaguar" and "Land Rover" from "Ford". At the same time, the new owners declare their intention to invest in the development of British brands. As you can see, there are two counter processes: the largest players in the global automotive industry are betting on gaining leading positions in promising fast-growing markets. The countries of strategic interest of the world's leading manufacturers include China, Russia, India. Large corporations open their own enterprises there or set up a joint venture with a local company. In turn, young "tigers" from the East are learning from the European grandees, hoping to break into the markets of the Old and New Worlds in the coming years.
We believe that no new mergers and acquisitions are expected in the global auto industry in the near future. In an environment where a global financial crisis is possible, large companies do not want to take risks. But in order to optimize their costs, they are actively creating numerous joint ventures - both among themselves and with companies in developing countries (to establish themselves in local markets). For example, the American Chrysler Holding and the Japanese concern Nissan have officially announced the establishment of a joint venture (JV). As part of a bilateral partnership, Japanese engineers will develop small cars by 2010 that will be sold in all world markets under American brands. Chrysler, in exchange for a platform for a small car, will produce full-size Nissan pickups (based on the Dodge-Ram) at its plant in Mexico.
As a result, each of the companies will save "only" a billion dollars and a lot of time … Now, in order to minimize costs and develop successfully, many companies "share" platforms of certain models or transfer their engines to a partner. Recently, such cooperation has been quite common even between completely independent companies. True, at the same time they try to produce models that do not compete with each other in the same market. In addition, companies can leverage each other's manufacturing and marketing capabilities. Otherwise, even the seemingly strongest and largest companies will not be able to survive in conditions of fierce competition. So do not be surprised if the stylish Italian off-road vehicle turns out to be slightly redesigned Japanese, and under the hood it has a diesel of French origin.