The Volkswagen group’s decision to get Skoda to lead-manage its India operations makes perfect sense at a time when automakers are investing big time in new technologies. It becomes difficult for companies to handle this alone simply because it will take forever to recover their investments. Hence, pooling competencies and resources is the best way forward to be able to cope with new mobility challenges, be it autonomous cars or electric mobility.

While on the subject of VW, it is attempting back-end synergies with two of its truck brands, Scania and MAN, to be able to save on costs. It has also tied up with Hino Motors of Japan to explore the option of working together in Asia and Europe.

More recently, VW and Ford have said they will look at working together in the arena of small commercial vehicles.

Likewise, other automakers are forging alliances or tapping other group brands to stay ahead in this competitive arena.

Fiat Chrysler Automobiles is on the fast track, thanks largely to the Jeep brand, which accounts for a third of its global sales. Even in India, the success of Jeep Compass has effectively buried the Fiat legacy.

Toyota and Suzuki have come together to forge a new path in India. There will be model swaps as well as cooperation in areas like hybrids and e-mobility. Suzuki is a huge player in India but small elsewhere. In the case of Toyota, it is truly a formidable global brand that has somehow not managed to make a big impact in India.

Whilst on the subject of Japanese companies, Nissan recently took a controlling stake in Mitsubishi which was in dire need of a bailout. There could be some interesting synergies happening in the ASEAN region where Mitsubishi is doing well.

Remarkable partnership

Renault, of course, has been a long-term ally of Nissan and the recent addition of Mitsubishi is expected to translate into significant savings in costs. Additionally, there will be economies of scale and the trio could just end up being a huge force to deal with in the coming years.

Renault-Nissan has a sprawling plant in Chennai which is the first manufacturing base for the alliance worldwide. Perhaps Mitsubishi will be part of this drive post-2020 though there has been no official confirmation on the subject yet.

The Renault-Nissan partnership has been going strong for nearly two decades now which is quite remarkable, given the diverse cultures between the two organisations. In contrast, the Daimler-Chrysler marriage came apart when it promised the moon at the time of its creation.

Chrysler has now become the lifeline for FCA which is still open to a partnership with another carmaker. It reached out to General Motors but nothing came of this eventually even while Chinese brands have reportedly expressed their interest in acquiring Jeep.

These are interesting times for the global automobile industry where it is all about partnerships in order to stay afloat. There will be more happening in the near future as consolidation becomes inevitable.

comment COMMENT NOW