#Alliances

The German Manager Magazin will write in its print edition that Volkswagen is considering buying all or part of Isuzu, the diesel-centric Japanese truck and commercial vehicle manufacturer. Volkswagen even has a codename for the deal: “Irene.” Another possibility: the truck firm MAN, which VW owns 30% of, could buy up an Isuzu stake, allowing VW to craft a three-part truck alliance between MAN, Scania and Isuzu. VW’s board member in charge of commercial trucks, Jochem Heizmann, is reportedly in Tokyo pursuing the acquisition and has inspected Isuzu. Toyota’s six percent stake in Isuzu (not to mention VW’s distractions integrating its Porsche and Suzuki alliances) could be serious obstacles. As VW and Toyota battle for the position of world’s largest automaker, Isuzu could become a symbolic battleground for the outsized ambitions of these two industry titans.

UPDATE: VW tells Automotive News [sub] that an Isuzu takeover is “not on the agenda.” Does that mean they’re not looking into the possibility? At this point, it’s not clear.

Earlier this week we learned that Saab can not pay its supplier bills until its Russian sugar daddy, Vladimir Antonov, gets Swedish government approval to buy into the company that owns it. Now, suppliers are speaking out, telling Automotive News [sub] that the brand and its owner, Spyker Cars, owes “tens of millions” of Swedish crowns (10m crowns equals about $1.6m). A representative of the Swedish suppliers association explains

There is a perception in the media that there are discussions on extended credit times and such. But it is not about that, it is about the fact that Saab must pay its bills. If they cannot sort out their financial situation, things look very bleak.

With a “desperate” hunt for investment underway, Saab’s only hope appears to be Antonov, who says he has $71.5m to invest, an amount that should cover the $4.7m+ supplier debts. Meanwhile, work at Trolhattan has been stopped for at least the rest of the week. But even if Antonov gets Swedish government approval to invest, another, equally dire problem appears to be materializing: a dispute over the use of the name “Saab.”

While we wait for more details coming out of the joint Toyota-Microsoft press conference scheduled for a few hours from now, we thought we’d share some of the more recently-released details. A press release notes that the two firms

have forged a strategic partnership and plan to build a global platform for TMC’s next-generation telematics services using the Windows Azure platform. Telematics is the fusing of telecommunications and information technologies in vehicles; it can encompass GPS systems, energy management and other multimedia technologies.

Now we know why Reuters became confused about Daimler and Renault: It’s those other French forging a bloody alliance with those other Germans as well!

Developing a new car with traditional technology costs an arm and a leg. Add future technology, and you are starting to talk real money. You need to spread the R&D costs across a lot of cars. The trouble is, massive sales of EVs are still just a dream. What to do in such a dicey situation? You look for partners. Renault and Daimler hammered out a new agreement. “Renault will supply the electric motors for the Smart and Twingo, we develop and make the batteries for both models,” Daimler’s head of research and development Thomas Weber told his hometown paper Stuttgarter Zeitung in an interview that will appear today in the print edition.

In an extended interview with Reuters, Nissan-Renault CEO Carlos Ghosn talks about the balancing act of leading two global automakers while maintaining their unique identities, a balance Ghosn says he wants to try to preserve even as the alliance looks to restructure its capital. Renault’s 44.3% stake in Nissan has caused some trouble with financial analysts because, as Ghosn puts it,

we are challenged (by financial markets) over how much capital we have imprisoned into the structure of the alliance. It’s a fair challenge. We are going to be studying and analyzing this with outsiders also, what are the ways to respond to these expectations from the financial markets without challenging the operating model which consists of keeping the two companies vibrant, motivated, engaged and keeping their identities

Does that mean a full merger? A new corporate structure? Where is Ghosn looking for answers as he attempts to give the markets what they want while maintaining the delicate balance between the needs of his two firms?

“Russia is an up and coming country with a sudden influx of foreigners,” says my favorite mail-order bride site. “there is a great deal of fascination about foreigners.” No kidding. The world’s automakers must be on a speed-dating jaunt through Russia. Today, Reuters reports that GM and Russia’s Avtotor are in joint venture talks. The plan: At least 300,000 cars per year. It’s not all idle talk, because Valery Gorbunov, Avtotor’s chief executive, told Reuters that a JV is definitely in the cards.

Developing new cars costs a good deal of money. Developing new power trains costs a huge pile of money with unsure payback. So what do you do when you are on the bottom rungs of the Top Ten, or god forbid if you traipse around somewhere in the twenties and if you have neither the money to invest nor the volume to quickly amortize your investment? You find friends to share the burden. This is what PSA and BMW do.

PSA Peugeot-Citroen is feeling its oats again. PSA “remains open to equity alliances with other partner companies in its sector,” PSA CEO Philippe Varin told the Dow Jones newswire. Well, after recent mass weddings that had produced mixed nuptials between Volkswagen and Suzuki, Fiat and Chrysler, and even Renault-Nissan- Daimler threesomes, PSA is looking for a tie-up again. The trouble is: There aren’t many attractive partners left match.com of the international auto business.

Toyota, possibly more than any other automaker, epitomizes a major tradeoff inherent in mass-market success: mechanical and stylistic homogeneity. Subaru, on the other hand, traditionally occupies the other end of the spectrum, slinging mechanically unique but ultimately niche-oriented products. Since Toyota took a 16.5 percent stake in Subaru’s parent company Fuji Heavy Industries, observers have wondered how the relationship between two so different automakers would play out. And since Subaru had already cultivated a fiercely loyal following with its dedication to niche values, the outcome has largely been that Subaru fans have decried the perceived “ Toyotafication” of Subaru. And now, if a new rumor from Motor Trend is anything to go by, the uproar is about to get a little bit louder.

Fiat split its auto business from the rest of its industrial operations today, creating two new companies: Fiat and Fiat Industrial. Fiat CEO Sergio Marchionne announced the move as a way for Fiat to unlock its share value and concentrate on its core business, telling the AP [via Newser]

This is a very important moment for Fiat, because it represents at the same time a point of arrival and a point of departure. Faced with the great transformations in place in the market, we could no longer continue to hold together sectors that had no economic or industrial characteristic in common.

But with Fiat Industrial taking care of the truck-and-tractor side of the business independently, Fiat SpA is focusing on the task at hand: Chrysler. With a 35 percent stake in the bailed-out American automaker in the bag, Fiat is aiming for a controlling stake when Chrysler’s IPO hits the markets later this year. And though the spin-off of FIat’s non-automotive business opens the door for a full merger of Fiat and Chrysler, Marchionne denies that a full merger will take place, saying only that

I don’t know whether it is likely, but it is possible that we’ll go over the 50 percent mark if Chrysler decides to go to the markets in 2011. It will be advantageous if that happens.

But don’t mind Sergio’s equivocation. Fiat will almost certainly snap up the remainder of a controlling stake by the end of this year. Here’s why…