By on December 18, 2009

Ready to tango? Picture courtesy artshole.co.uk

For some weeks, we have been following the steamy nampa between Japanese and European auto makers with more than prurient interest. First Mitsubishi and PSA (TBD), then Suzuki and VW (marriage consummated.) Now what? Now who? Suddenly, all eyes are on Mazda, the former wallflower of Nipponese car makers.

Bloomberg says that “Mazda Motor Corp. may be the next Japanese carmaker to strike an alliance following plans by Suzuki Motor Corp. and Mitsubishi Motors Corp. to team up with overseas manufacturers.”

Why the sudden urge to get married? We are in one of the worst times for cars ever (except for China.) At the same time, you have to invest now in new technology and new models, else you will be left behind in the next upswing. The car business is the highest stake poker game imaginable. It still takes around 5 years to develop a completely new car. A little less if you have lots of money. A lot longer if you are short of cash.  You have to place your bets now, and hope that in 5 years, you will have a solid hand.

On top of it come huge investments into hybrid, electric and other next- generation technology. There is no immediate payback, and future payback is unsure. Hybrids and electric cars amount to less than 2 percent of the global car market. By 2020, battery-powered vehicles will make up 10 percent of the market, Nissan Motor Co. Chief Executive Officer Carlos Ghosn estimated. It’s a long way to 2020.

Smaller players have an especially rough time. “Carmakers like Mazda with annual sales of about only a million units need to be exploring partnerships to survive,” said Yoshiaki Kawano, an analyst in Tokyo at auto consulting company CSM Worldwide.

Ford has reduced its stake in Mazda to 11 percent from 33 percent last year. It looks like Ford wants to get totally out of Mazda. So who will be the lucky groom?

Bloomberg thinks it will be Toyota. Our own Cammy Corrigan disagrees. Mazda may be buying hybrid technology from Toyota, but Toyota would not be interested in buying Mazda. As Ms. Corrigan said:” Who do you think they are? Volkswagen?”

Toyota remains tightlipped. “Even if there were talks of any alliance, I wouldn’t be able to speak about it,” said Toyota Executive Vice President Takeshi Uchiyamada a few days ago.

So if not Toyota, who else will take Mazda down the aisle? Place your bets, B&B. The lucky winner will be crowned TTAC Soothsayer Extraordinaire.

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32 Comments on “Wallflower Mazda, Ready To Tango?...”


  • avatar
    ozibuns

    Ford should reinvest in Mazda- they already share platforms and engines and Mazda has some of the best of both in the B/C and D segments, not to mention their crossovers.  Otherwise if it were an upscale brand, BMW would benefit fromtheir front drive expertise should it launch such cars in the future. 

  • avatar
    John Horner

    The company which should grab Mazda is Honda, but Honda has very little history of making acquisitions. Honda needs to grow a bit to play with the big boys in the long run.
    BTW, I think you mean VW and Suzuki consummated their marriage rather than simply consuming it :).
     

    • 0 avatar
      kaleun

      you mean Mazda should be like Honda, where int eh 80′s the Civic was desired by young and sporty drivers now is a bland sedan? Oh , no… and Honda doesn’t have a good hybrid drive train. Toyota would be better with technology 9if they just let Mazda designers do their stuff and don’t corollarize the cars)

  • avatar
    Davekaybsc

    Just curious, does Ms. Corrigan have any relationship to Jaguar’s Sharon Corrigan?

  • avatar
    Dimwit

    Nobody’s going after Mazda except Ford. All R&D has been worked between the two of them as been reported from this very site. What has changed? Nothing as far as I can see.

  • avatar

    Mazda has carved a BMW-like niche among Japanese automakers, producing cars which are consistently engineered for drivers. It will be a shame if they reach an alliance with someone like Toyota who seem largely interested in the appliance end of the auto business. The alliance with Ford has generated both the excellent Mazda 6 and Mazda 3 chassis, which today underpin Fusion and (the good) Focus. I hope Ford doesn’t leave them dangling in the wind…

  • avatar
    stars9texashockey

    Corollarize is my new favorite word.

  • avatar
    NulloModo

    The Ford/Mazda marriage has been good for both Ford and Mazda, giving Ford some of the best handling vehicles out of any of the mainstream automakers as well as some pretty nice and very reliable four cylinders, while Mazda has been able to take advantage of Ford’s economies of scale and has gotten the excellent 3.5 and 3.7 liter V6 engines.
     
    I’d like to agree that Ford’s move to dump some Mazda stock was just to free up some cash in troubled times, but as Ford of North America continues to align products with Ford of Europe I wonder if that is really the case.  Ford of Europe already has excellent small and medium sized car platforms that I don’t believe share a lot of Mazda DNA (at least not the Mondeo), as well as very well reviewed small displacement four cylinders.

  • avatar
    Omoikane

    The natural partner for Mazda is Tata Motors.
    By buying Mazda, Tata could become a truly global auto manufacturer covering the high-end SUV segment (Land Rover),  luxury car segment (Jaguar), intermediate/ sporty(Mazda) and passenger car base (Tata).
    Tata is already the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer.

  • avatar
    talkstoanimals

    Fearless prediction: Mazda + BMW.

  • avatar
    p00ch

    If Ford bails out completely, why not Hyundai? It could become their ‘sporty’ brand. Although  that would require a major change of cultural perspective for both sides.

  • avatar
    AnthonyG

    I would be surprised if Ford let another company go in and take Mazda over, but understandable given their financial state – they are not totally out of the woods yet, although they are getting there.
    Mazda are still pretty linked into Ford, on Euro platforms as well as US ones. The Mazda 2 is the same platform as the Fiesta, although it was a Ford led development.
     

  • avatar
    Mr Carpenter

    Since we can look back with 20/20 vision and see that Nash Motors’ President Mason was dead right in saying post-World War II, that all of the then healthy old line “independents” (Nash, Hudson, Studebaker, Packard) should merge and make up a 4th player (as in “big 4″ instead of “big 3″), I can surmise, can’t I? 

    How about PSA (Peugeot-Citroen) + Mitsubishi (already happening) + Mazda (still 10% owned by Ford) + Tata + BMW? 

    “Global Motors”.  Tata for low-end/asian BRIC nation cars, trucks and busses; Mitsubishi for electric and mid-range plus SUV’s; Mazda for sportier cars (including buying Toyota Hybrid Synergy Drive, as recently mentioned); PSA for Euro-market and South American market BRIC nation cars and euro-electric cars; BMW for top-end. 

    Yes I know Lee Iacocca wanted to do something similar to Mason, but worldwide, and he called his dream company “Global Motors”.  The nearest it ever came to fruition was the nightmare that was Daimler-Chrysler with a Mitsubishi tie-up. 

    Instead of having factions and fractured ownership, if these companies go in together?

    They need to fully merge all operations – if for no other reason than to survive. 

    Nothing like the hangman’s noose waiting for noon the next day, to focus one’s mind, is there? 

    Most of these companies won’t be here in 2 to 5 years unless they merge somehow. 

    • 0 avatar
      educatordan

      Mr. Carpenter, thank you for your solid analysis.  I could see this happening as long as the respective companies do not give into the GM-esque temptation to just badge engineer everything.  Although Tata has already gotten quite big for it’s britches with the acquisition of Jaguar.
       
      PS: Mr. Schmitt: Very nice but makes me think of what I liked once upon a time, tastes change thankfully.

    • 0 avatar
      Mr Carpenter

      educatordan, you are right.  Badge engineering won’t work.  Platform sharing won’t necessarily work in most instances.  But sometimes, it will. 

      But buying mass quantities of commodities will work, IF the company in question has a “River Rouge” vertical integration manufacturing ability. 

      Hence, it would make a lot of sense for some of the supplier companies to also go in with “Global Motors”.

      And yes, the BMW people and the Quandt family would have to swallow their pride as well as let go of some control, just as the Suzuki family has had to with their tie-up with Volkswagen. 

      The arrogant and proud won’t have a leg to stand on after the coming economic sh!t storm hits. 

      Study the Great Depression and how people started saying in 1931 “good times are just around the corner!” – then study what 1932 looked like, for some representation of what 2010 and 2011 may well end up looking like. 

      The old saying about people who don’t learn from history are bound to repeat it has a basis in fact. 

      Humanity has never been bright enough to do this for long period of time (learn from the past, that is). 

      BTW, with the (original George Mason) envisioned “American Motors”, he would have also invited major supplier companies such as Borg-Warner, Prestolite, Monroe, maybe even Bendix and Murray Body – to join in. As things happened, by the mid 1950′s Murray was defunct, and by the early 1960′s, Monroe was a minor supplier and by the 1970′s, Borg-Warner was essentially out of the automatic transmission biz. So it can be seen that a major tie-up would have saved the engineering expertise and jobs long-term, assuming that the big, conglomerate “American Motors Corporation” would have had sufficient size and market share over the years, to survive.

      Looking back to the 1950′s successes, it can be seen that more than a decrepid, temporary success story (the real American Motors Corp) would have potentially ensued.

      Rambler for economy cars (which absolutely took off from 1956)
      Studebaker for sporty low-mid priced cars (competing with Pontiac and having the Hawk predate the GTO by 8 years, as it did)
      Hudson for upper middle class, adventurous cars (think Oldsmobile back when they were adventurous enough to do FWD in the 1966 Toronado)
      Clipper to compete against Buick, Mercury and Chrysler (as a step-up brand to….)
      Packard, to compete against Cadillac (a step above Lincoln and Imperial, back in the day)
      Willys cars would have folded into Rambler and Jeeps would have become the SUV success story (eventually) that they were.

      It could have worked.

  • avatar
    dmrdano

    Asking a girl that looked like this chick to dance scared the crap out of a teenage me.  Basically because I could not take rejection.  And I would have been.

    Any company the tries to link up with another had better have enough in common that the response to the overture won’t be, “(sneer) Ah, no thanks!”  To be rebuffed soundly doesn’t look good to shareholders or potential customers.  Tata and Mazda or BMW?  Ah, no thanks.  Mazda and Hyundai could, however, dance rather nicely, but Hyundai would have to “Dear John” Kia.  Perhaps some match-maker could put Kia together with Tata. But if I were Ford, I would not let someone else cut in on my date with Mazda. There would be a fight in the parking lot.

    • 0 avatar
      Mr Carpenter

      I doubt if the Hyundai people would be willing to let go of (+/-) 50% of Kia to court JAPANESE Mazda (actually Toyo Kogyo, is their ‘official’ company name). 

      The Japanese and Koreans kind of loathe each other.  A lot. 

    • 0 avatar
      dmrdano

      Mr. Carpenter,

      Boy are you right on that.  I was only thinking about the types of car companies, not the cultures that are inseparable from them.

      See what happens when a boy just looks and doesn’t think?

    • 0 avatar
      moedaman

      Mr Carpenter, I can certainly vouch the Korean hate for the Japanese. A friend works at the Hyundai engineering facility in Ann Arbor. You should hear the things she says what the Korean nationals opinion of the Japanese are.  No way in hell would Hyundai want to work with a Japanese company.

      Although Samsung and Sony have a joint venture making LCD TV screens. So who knows?

    • 0 avatar
      Paul Niedermeyer

      You’re forgetting that much of the Korean car industry was based on cooperation with Japanese manufacturers. Early Hyundais were Mitsubishis; you can swap many parts from Hyundai Excels with Mitsubishi/Dodge Colts.

  • avatar
    shaker

    TATA… TATA

    Speaking of tatas, nice photo.

  • avatar
    fincar1

    I agree, Mazda/Ford goes back a long time. I first realized this when I noticed that my carpool driver’s Ford Aerostar van had the same power mirror control switch as my 1984 RX7. A very small metaphor for a long-running partnership that has had its ups and downs, and I suspect that the current “down” will be temporary.

  • avatar
    tedward

    I don’t really see what Toyota would be buying re: Mazda since they both play in the same sandbox. Mazda does do a better job finishing their cars, but it’s not like Toyota would buy in and then allow Mazda engineers to design the next Corolla. Just like Ford and GM in ages past, I imagine that would be unthinkable politically within the company. Besides, they’ve made moves on Subaru recently and the engineering “help” seems to be flowing in the other direction, despite the fact that Subaru also does (did) a better job than Toyota with respect to subjective details. 

    I’d assume that the Ford tie-in isn’t really going away anytime soon, for the same reasons stated repeatedly above. If I had to guess at a possible second suitor it would have to be a Chinese company. Ford would undoubtedly stop this, or at least do it’s very best to prevent any transfer of mutually developed IP.

  • avatar
    James2

    Here’s my fantasy. Mazda and Volvo get together. They already share the C1 platform, so they must already know how the other works/thinks. Both are second-tier players who need the economies of scale. One is Japanese, the other European, and they do not overlap in terms of niche, demographics, image, pricing. They both offer, aside from the Miata and RX-8, a predominantly front-drive lineup, so there are no engineering paradigms to break. And Ford wouldn’t mind the pairing, as any jointly developed platforms, technology, etc. isn’t going outside the “family”, so to speak.

    P.S. That’s no wallflower.

  • avatar
    talkstoanimals

    I think the problem with a Tata/Mazda tie-up is that Tata is already experiencing a heavy case of indegestion over their acquisition of Jaguar/Land Rover.  I doubt Rattan Tata wants to risk another lump over the acquisition of yet another ex-Ford universe brand.

  • avatar
    Dimwit

    I doubt Tata can get the money to buy *anything*. He’s maxed out.

    The big thing is look at both sides. What’s in it for me? Sure, Mazzda gets a dance partner, but as with the Mitsu deal, two weak ones don’t make a strong one, just a larger one. They need someone with strength, resources and willingness to be handsfree. There’s absolutely nobody out there that’s all 3. Any of the stronger players don’t need Mazda. Only Ford is in any position and they’re at the waiting stage, having to let the economy pull them through this dry spell before they can reinvest.


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