The 2019 Geneva Motor Show Is Basically a Middle School Dance

Matt Posky
by Matt Posky

As we get older, whole sections of our lives are mentally distilled into a handful of standout moments, accompanied by the broad strokes of shared experiences. Among them is the middle school dance, which really isn’t so much a dance as it is an opportunity for people to stand around wishing everyone would couple up and get the party started. Everyone’s hunting for a partner, but few will see that dream realized, leaving them to stand by their closest friends while they mumble “it sure would be nice to find someone to dance with” into their fifth cup of punch.

The Geneva Motor Show looked a lot like that this year. With car sales cooling, emission controls tightening, and ambitious mobility projects eating into automakers’ profit margins, many companies believe the industry is evolving. However, no one’s certain what the future holds, so they’re dabbling in everything. That’s not a sound business strategy, especially if there’s no one around to help you share the financial burden.

As a result, auto executives spent quite a bit of time in Geneva hinting that they could use a dance partner.

Bloomberg chronicled standout moments where high-ranking executives indicated they were open to corporate alliances, but only after it explained the industry’s current situation:

Profit warnings, missed targets and falling stock prices at parts suppliers like Schaeffler AG and ElringKlinger AG — mainstays of the industry — show the depth of the rumbling underfoot. Paired with the news that luxury segment archrivals BMW AG and Daimler AG are teaming up on autonomous driving, and Volkswagen AG is allowing a startup to share the electric-car technology it wants to make a global standard, the industry’s new contours are taking shape.

“We are entering a period where chaos is going to make competition extremely selective,” PSA Group Chief Executive Officer Carlos Tavares said in Geneva. “This perhaps changes the way our companies are operating and it could also raise opportunities for deals eventually.”

Despite (or perhaps because of) the event being awash with high-end luxury vehicles, trendy electrics, and premium performance cars for the extremely wealthy, automakers spent quite a bit of time talking about ways to cut costs and find help. PSA, which wants to get Peugeot back into North America, is keeping an eye on how to best make that happen. Fiat Chrysler Automobiles could be its point of entry. A merger could allow Peugeot to tap into FCA’s established dealer network and bring them up to speed on how the American market treats returning European brands.

“If there’s an opportunity for partnership, for an alliance, for a merger that could make us stronger, I will clearly look into it,” FCA CEO Mike Manley told reporters.

Tavares was not opposed to the idea, saying that he’s open to deals in general by saying, “this one or another one.” In addition to Fiat Chrysler, PSA is also said to be in talks with advisers from General Motors and Jaguar Land Rover.

Volkswagen already intends to share its new electric vehicle platform (MEB) with a battery-car startup based in Aachen, Germany, and has made serious inroads with Ford for the assembly of vans and pickups. The duo are currently exploring how to cooperate on autonomous driving in exchange for Ford’s access to VW’s battery technology.

Meanwhile, Nissan and Renault have had to contend with a scandal that saw its former patriarch, Carlos Ghosn, arrested in Japan over allegations of financial impropriety. While the accused has repeatedly indicated that his plight is the direct result of Nissan hoping to avoid a full merger, the company says it plans to continue collaborating as before.

However, the strangest prospective alliance has to be between BMW and Daimler — or it would have been, if the pair hadn’t already agreed to spend 1 billion euros on mobility projects (autonomous development, ride-hailing services, car sharing, etc). Their longstanding rivalry appears to be dissolving, as the two companies are now in discussions to further strengthen ties via joint vehicle development.

“Partnering is essential to survive the industry transformation,” BMW development head Klaus Fröhlich told reporters during a joint press event with Daimler AG’s Ola Källenius.

The brave new world the industry finds itself hurtling towards won’t just affect automakers, either. Parts suppliers face similar issues. Restructuring is taking place across the industry as profits slip and share prices ooze down the board. Parts companies can see the writing on the wall and know something must be done.

“Not everybody can afford to keep spending all this money, especially with how fast this innovation is coming,” Don Walker, CEO of Austrian-Canadian supplier Magna International explained. “There will be more cooperation, whether it’s through joint ventures or acquisitions.”

[Images: Geneva International Motor Show]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Inside Looking Out Inside Looking Out on Mar 07, 2019

    Why French auto CEOs all have Spanish name "Carlos"? On the serious note - what PSA is doing at Geneva auto show? They don't make any premium brands. I actually thought that it is much simpler to design and make EV because of their simplicity and much smaller number of moving parts. I saw future of EV as automakers making chassis and coach-builders - the customized body or one from catalog of various styles from leading stylists (mostly Italians).

  • Ralahamy Ralahamy on Mar 07, 2019

    Innovation is an overused and abused word these days.

  • Eric No, I just share my opinions. I have no use nor time for rhetoric from any side.
  • Redapple2 Jeez. This is simple. I 75 and 696 area. 1 nobody -NOBODY wants to work in downtown Detritus. 2 close to the tech ctr. Design and Engineering HQ. 20 miles closer to Milford.3 lower taxes for the employees. Lower taxes for Evil GM Vampire.4 2 major expressways give users more options to suburbs. Faster transport.Jeez.
  • Clark The Ring (Nürburgring) is the only race track I've driven on. That was 1985 or 1986 with my '73 Fiat Spider (and my not-so-happy girlfriend). So I made the Karussell (today: Caracciola Karussell, which I believe the author meant; there is another one: Kleines Karussell).
  • AZFelix This article takes me back to racing electric slot cars with friends on tracks laid out in the basement. Periodically your car would stop due to lost connections or from flying off the track and you would have to dash over to it and set it right. In the mean time your competitor would race ahead until faced with a similar problem. It seemed like you were struggling harder to keep from losing than trying to win. Fun times.“History never repeats itself, but it does often rhyme.” Mark Twain
  • MaintenanceCosts What Americans get told (a) vs. actual EV ownership experience (b)(and, yes, I am an actual EV owner)a. You'll be waiting indefinitely for slow chargersb. Nearly all of your charging happens while you're at your housea. EVs are prohibitively expensive toys for the richb. Fuel cost is 1/4 that of gas and maintenance about the same, with purchase price differences falling quicklya. EVs catch fire all the timeb. Rates of ICE vehicles catching fire are much higher, although the few EV fires can be harder to extinguisha. You can't take a road tripb. Road trips are a bit slower, but entirely possible as an occasional thinga. iTz A gOlF cArT!!1b. Like a normal car, but with nicer power delivery and less noise