After The Big One: Who Will Survive?
Martin Winterkorn, chief of Volkswagen, was asked by Automobilwoche [sub] who will be left standing when the big carmageddon—ooops—consolidation will finally be over. Here are his odds:
In the US, one maker will survive.
In Europe, two will crawl out from under the rubble and soldier on.
In Japan, “a few” will be left over.
In China, Marty sees “a massive concentration.” The Chinese offerings will be reduced to “half of the brands.”
He didn’t name any names. Except when asked about BMW and Daimler, Winterkorn couldn’t bite his tongue hard enough and smugly said: “Doing a parts purchasing co-op won’t be sufficient.”
So the world according to Winterkorn will host (guessing) Ford and VW (of course – who else?). In the Japanese corner, Toyota and a handful of others. And about 40 to 60 Chinese automakers. The number of Chinese Automakers is currently estimated (nobody knows for sure) to be anywhere between 80 and 120.
Winterkorn seems to be a little extreme. On the other hand - the Fiat CEO came up with a similar estimation some time ago, didn't he? My estimation: in the US: Ford in Europe: VW/Porsche, Daimler, BMW, Fiat/Renault/Peugeot in Japan: Toyota, Honda China: who knows. many small ones will die over time
If we talk about the survivors, we have to specify the question. By surviving you mean a manufacturing company or a generic badge slapping will also count? I am sure that at least one company from big three will survive, but in what state? Will it be a Vauxhall type of company, or a real manufacturer? It is not fair calling Saturn a survivor if all it does is rebadges german Opels. So I believe us car manufacturers will go the british way, everything will be sold out and the industry will live on from selling badges. Like they do with Elgin watches, IBM computers and Polaroid cameras today. None of japanese companies will go south because all of them are diverse in manufacturing practices.Also Europe will survive. Those who do not rebadge, but have a strong domestic engineering base, will always survive, and always had survived before. Unifying, rebadging and consolidating, borrowing and sense-making has always lead to disasters.Strong domestic engineering base is the best panacea for long term durability.Any company that tries to find failure everywhere but in their product, is destined to die...
Yeah, I forgot Honda. Shame on me. They'll surely survive as one of the few independent auto companies; they learned from their earlier debacles with Isuzu in the US and what used to be known as British Leyland in the UK. I also suspect that Mitsubishi and Suzuki would make very good permanent merger partners, given their relative strengths would actually benefit one another (i.e. Mitsubishi Bank and Mitsubishi Heavy Industry being "parents" of Mitsubishi Motors, and therefore "in-laws" of a marriage between Mitsubishi and Suzuki; plus Suzuki is very strong, and these two companies already collaborate in autos in some minor markets now). Suzuki is very strong in kei cars (in Japan) and in the increasingly important Indian market, Suzuki are #1. Mitsubishi has a worldwide following of their Evo high-performance cars. My thoughts were that the corporate name should be Suzuki-Mitsubishi and the vehicles (including motorcycles and marine engines) should be sold as Suzuki, with the possibility of bringing back the Mitsubishi name at a later date, as an upscale marque with "Debonair" luxury cars. Once the global economy stabilizes and starts to improve, whenever that is... (five years, six?) Of course, the worldwide dealer networks would be merged in most cases, perhaps retaining two dealer networks in certain countries like Japan, where you might have "Red S Suzuki dealers" (Suzuki) and "Red Three Diamond Suzuki dealers" (ex-Mitsubishi vehicles), with a 3 or so year timeframe to rationalize the car lines and either sell all cars through all dealers (which would simply become Suzuki dealers), or divide the vehicles between the dealers (Toyota do this in Japan with several types of dealers; some are Toyoda, some Toyota, etc.), likewise, this could be the case in Taiwan where there are two distinct lines. In India, Hindustan could simply license-badge their Mitsubishi cars as Hindustans, and Suzuki-Maruti would have no changes except the freedom to add any ex-Mitsubishi vehicles not mfd. by Hindustan. In China, the two each partners of Mitsubishi and Suzuki might be wise to all simply merge into one entity or two (if Mitsu and Suzuki merge, the Chinese government will only apparently allow two 50/50 joint ventures with the merged Japanese company, anyway, from what I understand).
Both Mitsubishi and Hyundai---being vertically-integrated companies, will survive!