Another week has flashed by – almost the end of leap year February with Geneva about to pounce, it really is true time goes faster the older you get. An interesting and varied mix of news, too.
Let’s start with the French and British reports this week – General Motors talking alliance with PSA. The idea is to develop cars, or bits of cars, jointly and, maybe, though it was not mentioned, build ’em together without the complication of a merger, stake-taking, cross-shareholdings etc. This makes sense and hardly reinvents the wheel in today’s auto industry. Not having some degree of merger keeps the private family shareholders in France and, probably the politicians happy – can’t have century-old French automotive silver getting into the hands of Americans can we? – and probably much the same view would be taken by shareholders, particularly the institutions, the other side of the Atlantic who might fret a stake in a French company struggling in Europe, territory also really challenging GM right now, could adversely impact the bottom line of a revitalised US-based firm on the up again, European operations notwithstanding.
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There’s nothing new in the sort of alliance apparently under serious discussion and both companies already enjoy similar arrangements with other automakers. PSA shares engines and their factories with Ford and BMW. GM shares small vans with Fiat, which does most of the development and the building. Many of GM Europe’s small I4 engines, petrol and diesel, either trace ancestry back to a joint powertrain venture, now dissolved, but still come from the now entirely Fiat-run powertrain company that succeeded the JV. In larger vans, GM shares models with Renault and Nissan and runs the UK plant that builds a large proportion of them. And so it goes.
And this idea isn’t new. Go back through the General’s global history and there are all sorts of model-sharing alliances; with Toyota in Australia in the ’80s and ’90s (anyone remember the Camry-based Holden Apollo or the Holden Commodore-based Toyota Lexcen?). There was the ’80s deal that saw Daewoo build a modified Opel Astra for GM to buy back as a Pontiac Le Mans for sale in the US and New Zealand, and various, mainly commercial vehicle alliances with Isuzu (Bedford-by-Isuzu trucks in the 1970s) and Suzuki (1980s Suzuki Carry/Bedford Rascal small van) so there’s no shortage of vast GM experience at conducting any number of differently structured liaisons. Or at PSA, whose other current alliances include sharing crossover models and a Russian plant with Mitsubishi, who was once in bed with Chrysler, and so it goes.
Although there is cross-shareholding, the Renault-Nissan alliance shows the benefits that can be enjoyed by both parties under such an arrangement. Before one Carlos Ghosn got involved, Nissan Motor was a basket case. Decade or two on, the Japanese partner is on a roll in China (where it partners with Dongfeng), and its European-made range has been transformed from the forgettable Almera and Primera to the Juke and smash-hit Qashqai/Dualis crossovers with locally produced Leaf EVs and attendant battery plant on the horizon. And Nissan now consistently reports financials in black ink; though there is still lots of work to be done on Renault, which is struggling in Europe but expanding as fast as it can in fast-growing emerging markets like South America and Russia. Nissan, Renault and Korean unit Samsung share a few models but the main ‘synergy’ is in the flow of engines back and forth – Renault being particularly good at I4 diesels; Nissan at creamy-smooth petrol V6s – joint platform and powertrain development and, though it’s not often mentioned in despatches, I’d add the interchange of good management and their ideas and the Japanese expertise in production engineering and manufacturing.
So I’ll be very interested to see what GM and PSA cook up, I suspect not before too long – and how it all works out. Editor Dave Leggett, an economist and analyst by trade, has run experienced eyes over GM Europe’s dilemma and formed a view I commend to you for a weekend read.
You also get an idea of just how great the challenge facing European automakers from another this-just-in story on Friday – seems like Mr Ghosn is mulling a very drastic pruning which I trust has registered with Fiat’s not always very cooperative unions.
Speaking of alliances, and Peugeot, we had news this week of a slow-down at the Czech Republic JV plant that churns out the Peugeot 107, Citroen C1 and partner Toyota’s Aygo.
We haven’t forgotten Saab, starting our news week with this report confirming a Youngman bid for the automaker more or less as a going concern and, this just in, about Geely-owned Volvo bidding only for selected assets. A piecemeal break-up is not what the unions or creditor suppliers want to see.
M&A activity never lets up, particularly in the post-restructure components world, hence you might be interested in news of this likely Visteon divestiture.
Finally, Honda and Mercedes-Benz this week both introduced new smartphone/tablet apps, moving the digital brochure on to another level. Being a bit of a gadget and technology nut, it would have been rude not to have had a go…
Have a nice weekend.
Graeme Roberts, Deputy Editor, just-auto.com
