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Discussion Starter · #1 ·
BALOCCO, Italy (Bloomberg) -- Fiat Chrysler Automobiles CEO Sergio Marchionne sees potential to form a new No. 1 automaker as companies grapple with low returns on the growing amount of money needed to develop a new car.

“There is room to create one guy which will be bigger” from the outset than current leader Toyota Motor Corp., Marchionne said in a joint interview for Bloomberg Businessweek with Chairman John Elkann at Fiat’s Balocco test track in northern Italy. “The industry needs it, as it’s still very fragmented” for the amount of capital required to develop and produce new vehicles.

Marchionne is one of the few executives to pull off a recent merger in the auto industry. Chrysler’s former partner Daimler AG sold the U.S. automaker at a loss after culture clashes limited the extent of the savings generated from the combination. Similar issues scuttled plans by Volkswagen AG and Suzuki Motor Corp. to work together. The two have been in arbitration for years as the Japanese carmaker tries to force VW to sell a 19.9 percent stake.

Willingness to combine could increase as the auto industry gets even more competitive. Regulators are requiring ever cleaner vehicles, while consumers demand more gadgetry such as voice control, in-car Internet and self-driving features. Those burdens combine with modest growth expectations. IHS Inc. forecasts that car sales will increase globally by about 3.5 percent a year on average through 2017.

The level of competition, capital needs and cyclical nature of the auto industry should force more mergers and acquisitions, said Richard Hilgert, a Morningstar Inc. analyst in Chicago. “These companies strive for economies of scale to keep prices down,” he said.

Fiat Chrysler Automobiles NV, the entity being created from the merger with its U.S. unit, “will be ready to participate” in the consolidation process that might take place over the next five to 10 years “if it makes sense,” said Elkann, 38, who hired Marchionne in 2004, when the Turin-based manufacturer was near bankruptcy.

The two executives said the carmaker, the world’s seventh largest, doesn’t need a deal and will look opportunistically at combinations with peers that have operations outside Europe’s overcrowded car market. Neither identified likely participants in the industry’s consolidation.

“It’s as important to walk away from the table as it is to sit down,” said Marchionne, 62, while smoking Muratti cigarettes and sipping espresso after accelerating his black Ferrari Enzo to more than 300 kilometers per hour (186 mph).

Fiat Chrysler shares will start trading on the New York Stock Exchange on Oct. 13. The company premiered the Fiat 500X crossover at the Paris auto show last week. The model, which shares engines, transmission and other key parts with the Jeep Renegade, is an effort to show that the combination has the firepower to compete with larger global rivals like VW and General Motors Co.

Not selling

Even without a deal, Fiat says it aims to climb to sixth place in the global ranking by expanding sales with vehicles such as the Renegade and a series of new Alfa Romeo models. Fiat Chrysler has said it will deliver 7 million cars in 2018, compared with last year’s 4.4 million. That was less than half Toyota’s sales.

Elkann, who also runs Exor SpA -- the holding company of the Agnelli family, which founded Fiat and still owns 30 percent of the company -- plans to back the carmaker for the long term.

“I’m not a seller,” said Elkann at a separate meeting in his Turin office, which was previously occupied by his grandfather, former Fiat Chairman Gianni Agnelli. The family’s stake could be diluted in a deal “if there will be the case to make the company stronger.”

Fiat Chrysler’s board will meet at the end of October to evaluate the company’s finances for its 48 billion euro ($60.7 billion) expansion plan. If fresh capital is needed, Elkann said he’s ready to support the carmaker’s implementation of its five-year plan, which will be Marchionne’s swan song.

LINK

MMmm Fiat No1 automaker, maybe Marchionne’s gonna get the Mafia to put a horses head in Toyoda's bed.
 

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Discussion Starter · #3 · (Edited)
I could definitely see Fiat picking up Mazda, but I'm not sure where any other mergers would really come from...
Tony's amphibian Ice Cream vans made by Fiat are the future with lot of hot weather & sunny days predicted people will need more ice cream, Al Gore said they are global warming ready and polar bear friendly.

 

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I could definitely see Fiat picking up Mazda, but I'm not sure where any other mergers would really come from...
First one that came to mind was Mazda. Even with Mazda, I don't think FCA will be able to top GM, Toyota and VW. Maybe we are wrong?? Maybe they are looking at Mazda and another Japanese company, maybe they are even looking at Mahindra?? Who knows, really.
 

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I could definitely see Fiat picking up Mazda, but I'm not sure where any other mergers would really come from...
This. Plus Mazda could use the resources that FCA has, so there is a definite dual-benefit, especially if they look at Fiat Group for Europe mainly, Chrysler Group for NA, and Mazda for much of Asia. Could be a serious benefit to FCA to have that door opened up. Subaru is already with Toyota to an extent, Suzuki is trying to get away from VW, and Mitsubishi needs (like Suzuki) a whole lot more work RIGHT NOW than does Mazda. Mazda's current lineup is actually quite good. I like this the more than I think about it, and maybe Mazda could expand a bit more than they seem to at present.
 

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If the present kinda' 'political economy' continues to be practiced, then amongst many other things - there will be some seriously large consolidations.

No financial system over haul means less pie along with pie distribution inefficiencies - and that will assure 'less auto'.

And of a different sort in all other ways as well.

Throw in the regulatory requirements and .....

Further growth in the BRICS and related can mask that as it has essentially already.
 

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Discussion Starter · #8 · (Edited)
Qoros? Mitsubishi?... Europe (Fiat), Chrysler (U.S.)... So Asia should come next I guess.
Daewoo Chevy Korea would be a good match in Asia, build quality is just one notch down from a Fix It Again Tony.

Have you been to Area 51 voyager , l have always wanted to have a vacation there, it a bit off the beaten tourist track.
 

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There are a bunch of automakers who are doing fine now, but may hit a cost vs. growth wall if they don't find a partner. Mazda is obvious, but Honda, despite its considerable success in some markets, may not have the scale required going forward. Mercedes is trying the strategic alliance angle, which may work, but history has shown that this is a hard road. We'll see how BMW's push downmarket goes. If it hurts the brand, it may make sense to add something less boutique than MINI to the portfolio.
 

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Discussion Starter · #10 ·
There are a bunch of automakers who are doing fine now, but may hit a cost vs. growth wall if they don't find a partner. Mazda is obvious, but Honda, despite its considerable success in some markets, may not have the scale required going forward. Mercedes is trying the strategic alliance angle, which may work, but history has shown that this is a hard road. We'll see how BMW's push downmarket goes. If it hurts the brand, it may make sense to add something less boutique than MINI to the portfolio.
A mini-me D-Type

 

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There are a bunch of automakers who are doing fine now, but may hit a cost vs. growth wall if they don't find a partner. Mazda is obvious, but Honda, despite its considerable success in some markets, may not have the scale required going forward. Mercedes is trying the strategic alliance angle, which may work, but history has shown that this is a hard road. We'll see how BMW's push downmarket goes. If it hurts the brand, it may make sense to add something less boutique than MINI to the portfolio.
Honda and Daimler have deep pockets. Both had operating incomes last year that exceeded GM's and I think Daimler's OI also exceeded Ford's. The only major market Honda has been less successful in is Europe, where the Honda brand lacks the clout of the domestic mainstream European brands and Acura has never been introduced (nor is it likely to work there anytime soon). This is likely the reason Honda had the alliance with Rover years ago and it could be argued that, say, PSA maybe should consider some serious work with Honda. If Honda and PSA invested together in DS to make it a world class global luxury brand (Honda's Acura never got anywhere, globally or otherwise), Peugeot and Citroen would be most successful in Europe with Honda covering much of Asia and NA. Neither is likely to do it any time soon as both are already quite large but PSA isn't doing terribly well despite their advantages so it's something to think about - for both parties.

But you are quite right. A lot of seemingly medium-scale companies like Suzuki, Mitsubishi, and Mazda are either going to become part of auto groups like FCA, PSA, and GM, merge outright with other companies, or lastly, go out of business. This isn't in the near next few years but seems likelier for the decades to come.

The issue is that the mergers or auto groups need to make sense for the brands. On the subject of this thread, Mazda could be the gateway to much of Asia for FCA while Mazda wouldn't really benefit, say, Toyota. Still, stranger things have happened. I believe that Renault-Nissan is intensifying their alliance with Mitsubishi.
 

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VW will move to purchase part or all of fiat/Alfa/dodge/Chrysler/jeep
 

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Ford + Toyota.

Or..... from China XXXXX + ????? which will come, but the real question is more about when.

***
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Hard to see how GM would or could be in the mix.

( Lotus ? )

At least in the first round.

The French Firms + German Firms perhaps somehow.

Including perhaps Nissan / Renault.


And you just know all the little tigers in the JDM have to end up somewhere.....




So really..... largely wide open I suppose.

Hydrogen PTs....... are going to push some of this along - somehow.

Well that plus the 'ole rules about the 'smallest', weakest and sickest and those less prepared for the future and or a downturn.
 

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I could also see FCA picking up a Japanese brand, whether it be Suzuki or Mazda. Mazda might compete with Dodge a little bit in the performance segment, but it could still work. Suzuki could make an entrance to our market again if FCA acquires them. Subaru would be too close to Jeep in concept, so I doubt FCA would want it.

Ford, Toyota, Honda, and GM don't seem like they would be interested in making any brand purchases right now.
 

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VW will move to purchase part or all of fiat/Alfa/dodge/Chrysler/jeep
If they were to attempt that, you would likely end up with a modified replay in a sense of the RR / Bentley split.

Meaning about BMW gettin' in there somehow. ( Not about splitting things up. )

((PSA ? ) + FCA ) + BMW somehow seems more likely in that BMW and MB could not allow FCA + VW.


In some ways the French ( with ot without the Chinese ) may end up the key..... that then opens the flood gates.


Most forget that France was a far greater automotive power house than the rest of the world combined pre 1909 and still quite strong for a time after.
 

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There are a bunch of automakers who are doing fine now, but may hit a cost vs. growth wall if they don't find a partner. Mazda is obvious, but Honda, despite its considerable success in some markets, may not have the scale required going forward. Mercedes is trying the strategic alliance angle, which may work, but history has shown that this is a hard road. We'll see how BMW's push downmarket goes. If it hurts the brand, it may make sense to add something less boutique than MINI to the portfolio.
I can see Mazda and BMW hooking up. They're both "driver's cars" and there's zero overlap between the two. Nothing else really makes sense. I'm not trying to rehash anything here, but GM couldn't keep Pontiac, Olds, and Buick around at the same time, so two mainstream brands can't survive together. I think we're more likely to see hook-ups on specific vehicles, like we're seeing with Alfa and Mazda making a new Spyder/Miata.
 

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I could also see FCA picking up a Japanese brand, whether it be Suzuki or Mazda. Mazda might compete with Dodge a little bit in the performance segment, but it could still work. Suzuki could make an entrance to our market again if FCA acquires them. Subaru would be too close to Jeep in concept, so I doubt FCA would want it.

Ford, Toyota, Honda, and GM don't seem like they would be interested in making any brand purchases right now.
Ford went through a phase of aquiring brands and then disposed of them a decade or so later, eg Aston Martin, Jaguar, Land Rover, Volvo - GM hasn't successfully aquired a brand for a century or so, eg Daewoo, Saab, Opel, Holden - Toyota and Honda don't like losing any control so licence-build of their products is as good as it might get.
 

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Daewoo Chevy Korea would be a good match in Asia, build quality is just one notch down from a Fix It Again Tony.

Have you been to Area 51 voyager , l have always wanted to have a vacation there, it a bit off the beaten tourist track.

At least FIAT group exists and is growing, and is making good cars again.
Where are crappy Oldmobile? gone and forgotten.... How big was the GM bailout again... Like GM are quality leaders... ffs.
 
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