DaimlerChrysler chief executive Dieter Zetsche has told Reuters that cost-saving benefits from alliance pacts were hard to come by, cautioning against optimism amid talk of a possible three-way link between General Motors , Nissan Motor and Renault.
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“When you refer to the most recent speculation of that alliance, you’re talking about pretty high volumes but reduced incremental saving potential,” he told the news agency, noting that cost benefits were small when more than a million vehicles were involved in sharing components.
“There are very few suppliers that are able to offer you parts in that quantity, and the scale effect goes to zero,” Zetsche told Reuters in Tokyo.
Reuters noted that Nissan has said it has no interest in any outright merger, while its chief executive Carlos Ghosn has said the Nissan-Renault partnership would only consider deals that would benefit all parties involved at the operational level.
But Zetsche, credited for bridging the cultural gap between DaimlerChrysler’s Stuttgart headquarters and Chrysler in the US, which he headed until last year, said realising pure operational synergies from a shared vehicle platform, for instance, was much more complicated than it might at first seem.
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By GlobalData“You have to look at the life cycle of vehicles and the matching of renewal cycles,” he said.
“It’s not only that it takes five or six years until you have this opportunity of joining forces for one platform, but all of it has to match – by accident, I would say – the portfolio of the other guy.
“So even though every M&A guy will immediately give you billions and billions of synergies if you only think about an alliance, the real world is somewhat tougher and longer on the time line,” he told Reuters.
The report noted that Nissan and Renault, led by Ghosn, have given no specifics over what areas of cooperation they could consider with GM, but joint parts procurement is widely seen as one possibility.
