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With the opening up of the economies the world over and friendly government laws being implemented, things are changing fast and one of the economic sectors which has been affected by this current trend is the Automotive Industry. The rapid mergers that are happening around the globe and aggressive expansion plans of the automotive titans make this industry much more competitive and challenging than ever before. The automotive companies that were being bought and taken over partially or entirely by their competitors are Chrysler, Rolls Royce, Bugatti, Bentley, Volvo, Saab, Lamborghini, Suzukiand Daihatsu.
Factors such as strong brand name and production capacities of these acquired companies are playing a key role in these consolidations. Moreover, increasing costs on R&D and the necessity to enter difficult markets are what prOpelling these companies to merge with one another. |
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Although different, the various automotive companies seem to be playing the same ball game altogether. For example, both Ford and Volkswagen believe in acquiring globally acclaimed brands and so have acquired Jaguar, Volvo and Lamborghini. The strategy of DaimlerChrysler and Renault is of entering new markets like Japan and Korea through the mergers. Furthermore, some companies like General Motors are of the opinion that buying companies will enable them to acquire technology and parts at a lower cost.
While on the other hand, smaller auto manufacturers like Nissan and Mitsubishi which are also being acquired, also go in for the consolidations to cut down on the cost of technology and other financial issues.
Unfortunately, on the flip side, as a result of these mergers the consumers will be the worst affected as they will be required to cough up more for the vehicles. Furthermore, they will be required to make a choice from amongst a rapidly diminishing number of auto groups.
To conclude, the global automotive industry is expected to witness more mergers in the coming years and is headed for a tremendous growth, both quantitatively and qualitatively.
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Automobile News
