The automotive industry is undergoing a bout of merger-mania. Last week, Daimler and Geely announced their joint venture in China, manufacturing electric Smart cars for the global market. This newspaper reported that Renault aims to restart merger talks with Nissan within 12 months and then acquire another carmaker, with Fiat Chrysler among preferred targets — and that John Elkann, the Fiat Chrysler chairman, is making a renewed push for a tie up. Early this year, Volkswagen and Ford announced a global alliance.
Cooperation between carmakers is not always smooth, but it is crucial to the industry. With sales declining across key markets and a shift towards electric vehicles, joining forces may be the only way for many manufacturers to stay competitive — or even survive.
Over the past year, car sales in China, now the world’s largest market, dropped by 4 per cent. The first fall in almost three decades is the result of a national economic slowdown, compounded by the end of a sales tax break from 2015. The EU passenger car market contracted by about 1 per cent in February compared to the previous year. In the US, despite a stronger than predicted 2018, most analysts expect to see a fall in car sales this year.