China has Scared the Global Automotive Industry

Asian Groups in Ambush

Right now, only Great Wall is showing some power in the global auto industry as they show tendency to buy Jeep even without talking to the brand’s owner directly. It seems that none of major automakers could face this great challenge. Selling Volvo to Geely or Jaguar-Landrover to Indian company TATA was only concerned in the past, but today it has become more than transferring the technology between two parties. We are observing a reform in the global auto industry and have to face with more automakers merging news.

"There are two strategies in this field. First, companies can reach a higher production rate and lower cost under merging. Second, companies will supply all their cost through huge investment of another company.” Givem Kernol, expert in auto industry said. 

Some of the major automakers have chosen the first strategy to figure out some lacks in technology, financial resource and market development. VW and BMW, Rolls-Royse and Lamborghini merged in top levels. Crysler with Mercedes and Renault, Nissan and Fiat merged in middle levels and in low levels, Mazda and Mitsubishi, Kia and Volvo merged.

Renault chose the first strategy and was successful. Last year, Renault – Nissan was the first company in the queue of buying Mitsubishi or bought 25 percent of autos company. This kind of works leads the company to pass the VW, Toyota and GM to be at the top of the best automakers in the world.

Other automakers such as Honda, Hyundai – Kia or PSA Group in 4 to 5 million cars per year had some merging without making difficulties for other companies. peugeot– Citroen bought Opel as a part of this strategy, but it was geographically limited to Europe again. 

Asian companies are geographically limited, too. Suzoki have 40 percent of India’s market under Marooti Marque or SsangYong was merged with another Indian brand. On the other hand, some of these automakers would have been closed long time ago without merging. 

"Within 10 years from now, automakers will face big challenges such as evolution in transporting, new technologies for less emissions. These changes would make great potential for investing and automakers should use the chance to keep their market.” Kernol said. 

Right now, old method of marketing is changing fast and new kind of cars is going to change the players in the global auto market. Autonomous or electric cars and…, will change the market in the near future. 

Defending Strategy 

Some experts believe that automakers can change standards due to defend their market instead of merging. BMW, Audi and Mercedes bought the nokia mapping technology in order to compete with google. 

An auto industry analyst mentioned that china is gathering 70 commercial brands and has a 24 million car per a year market. It is obvious that china has a plan to become the master of this industry soon.