Car brands must work together even more to survive

According to insiders, more will change in the automotive industry than ever in the next five years. Investments in electric vehicles, autonomous driving and mobility solutions are being requested at the same time. Can all brands achieve that? Will there be even more mutual cooperation or will manufacturers go under?


According to insiders, more will change in the automotive industry than ever in the next five years. Investments in electric vehicles, autonomous driving and mobility solutions are being requested at the same time. Can all brands achieve that? Will there be even more mutual cooperation or will manufacturers go under?

Rover, Saab, Pontiac, just some brands that had to close their doors in recent years. The cars of Rover and Saab still live on in China, but as it was, it will no longer be.

"Saab and Rover only came after selling GM and BMW respectively. Both Saab and MG-Rover did not then have the opportunities / money to continue to develop. You then have to rely more and more on rapidly aging products and ultimately you manage that not in this market, "said Max Erich, sector economist automotive and industry at ING.

The current car landscape is now also determined by large groups, each consisting of a handful of brands. Think of the Volkswagen Group, to which Audi, Bentley, Bugatti, Lamborghini, Porsche, Seat, Skoda and Volkswagen belong. Or the French PSA, which now includes DS and Opel in addition to Peugeot and Citroën.

Saab's models disappeared from the street scene

Requested investments make collaboration necessary

It doesn't stop there. Even more cooperation is a must, a high-ranking BMW employee recently confirmed. In conversation with NU.nl, board member Klaus Fröhlich said that, in view of the required investment in new technology, BMW is now cooperating with eternal competitor Daimler, parent company of Mercedes-Benz. Both parties will work together on autonomous driving and mobility services.

With autonomous driving, it makes little sense to want to develop it on your own. "You make autonomous systems / software better by collecting as much data as possible. So that goes a lot faster if you work together", Erich explains.

"For mobility services and platforms as well; you need as much supply and demand as possible, for example, for a car-sharing platform to work properly. That chance is greater for car manufacturers if you start working together. There you see traditionally large competitors BMW and Daimler just work together. "

BMW and Mercedes-Benz have joined forces

Forecast Sergio Marchionne comes true

This appears to be one of the predictions of Fiat Chrysler Automobiles CEO Sergio Marchionne, who passed away last year. Years ago he warned that far-reaching cooperation was the only way to survive.

According to Marchionne, competitors should consider unthinkable deals. In 2015, he said that collaboration between Fiat Chrysler (FCA) and Ford of General Motors, the big American three, was not excluded.

It did not come to that, but that does not mean that deals have not been made in that spirit. Ford announced a partnership with Volkswagen earlier this year. PSA, after having previously taken over Opel, is now linked to FCA. The alliance of Renault, Nissan and Mitsubishi is said to have focused on FCA.

"Moving towards more scale has always been present in the car industry. With scale you have more power over suppliers (and lower prices) and you can spread development costs over a much larger number of cars. So lower development costs per car. Need more scale has greatly increased due to the transition to electric, autonomous and services, "says Erich.

Sergio Marchionne, who died in 2018, saw the storm years ago

"They haven't got anything yet"

FCA seems to be most at risk of missing the current competitive battle. Where with other manufacturers the plug-in hybrid cars and electric vehicles are flying around you, it remains deafening at FCA. The company is indeed profitable, but that is mainly thanks to the SUVs from Jeep and the pick-up trucks from RAM.

Fiat sales have been declining for years and the new Alfa Romeo models have not brought the desired success. Chrysler and Lancia are only sold on the home markets. It is therefore not inconceivable that these two brands will eventually disappear.

"Alfa Romeo will also continue to have problems. They have to come up with the new Tonale SUV soon. In addition, they are lagging behind in the area of ​​electrification. They have nothing yet," says Stéphan Vermeulen, coordinator at AutoWeek .

The Alfa Romeo Tonale, still a study model

Little distinctive character

Only in the course of this year, the first electrified cars from FCA on the market, the Jeep Renegade and the Jeep Compass. At the beginning of 2018, Marchionne said that electric driving is still not a good investment. As far as he was concerned it was, at most, a good way of keeping an eye on future regulations.

That is not an illogical idea for Erich. "You can distinguish yourself less easily on an electric drive. An electric power train actually always works quietly, smoothly, shock-free and quickly. So it makes less sense to continue to develop everything on your own if you can't or cannot distinguish yourself with it in the market."

Partly for that reason, according to Erich, manufacturers have less difficulty developing an electric platform together. An example is also Volkswagen's recent step to open its new electric platform to other manufacturers. "That was practically unthinkable in the past."

Volkswagen is opening its platform to other brands

"If you stay alone, it will be difficult to survive"

According to Erich, the biggest question marks for the manufacturers are between the independent players on the market, such as a brand like Mazda, and the smaller groups, including Jaguar Land Rover. The poor performance of the group weighs heavily on the results of parent company Tata. Jaguar Land Rover is now on the radar of PSA.

"In fact, the smaller you are, the greater the need for merger / cooperation. Certainly outside the top ten, you really have to connect with others. Some people like BMW / Daimler do that too. For others, it's still a question However, if you stand alone, it can become difficult to survive in the next decade, "concludes Erich.

It is Jaguar Land Rover by the year 2019

ref: nunl