Welcome to the New World Order of automakers. Soon, only the big survive

CNN Business01-03 18:00

New York CNN — Honda and Nissan are the latest automakers to discuss combining forces. They won’t be the last. The two Japanese automakers announced last...

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Soon, only the big survive\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-03 18:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://edition.cnn.com/2025/01/03/business/automaker-mergers-to-come/index.html><strong>CNN Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>New York\nCNN\n         — \n    \n\n\n            Honda and Nissan are the latest automakers to discuss combining forces. They won’t be the last.\n    \n\n            The two Japanese automakers announced last...</p>\n\n<a href=\"https://edition.cnn.com/2025/01/03/business/automaker-mergers-to-come/index.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"L","symbol_name":"洛斯公司","start_time":0,"source_url":"https://edition.cnn.com/2025/01/03/business/automaker-mergers-to-come/index.html","article_id":"2500194886","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2500194886","pubTimestamp":1735898442,"columns":[],"sourceInfo":{"source_id":"cnn_highlight","name":"CNN Business"},"weMediaInfo":null,"summary":"Honda and Nissan are the latest automakers to discuss combining forces. They won’t be the last.The two Japanese automakers announced last week that they plan to merge and create the world’s third largest automaker. Details aren’t yet finalized, but they expect to announce the combination within six months.Mergers in the auto industry are nothing new. They have taken place since the acquisition of various brands formed General Motors  in the first decade of the 20th century. But experts say the Honda-Nissan deal could help to spark a string of combinations that could soon reshape the industry. Although consumers have shown an appetite for driver assistance features such as auto braking and hands-free human-supervised highway driving, the promise of actually building true self-driving cars has proven elusive. GM recently pulled the plug on its robotaxi plans, citing the costs. Ford had dropped much of its self-driving development efforts in 2022. 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They won’t be the last.\n    \n\n            The two Japanese automakers announced last week that they plan to merge and create the world’s third largest automaker. Details aren’t yet finalized, but they expect to announce the combination within six months.\n    \n\n            Mergers in the auto industry are nothing new. They have taken place since the acquisition of various brands formed General Motors (GM) in the first decade of the 20th century. But experts say the Honda-Nissan deal could help to spark a string of combinations that could soon reshape the industry\n    \n\n            “I think the environment is there for additional mergers,” said Jeff Schuster, global vice president of automotive research for GlobalData. “I don’t think Honda-Nissan will cause more deals to take place, although it could accelerate them.”\n    \n\n            The factors driving possible deals, from technological change and the industry’s huge appetite for R&D and capital spending to thin profit margins, are numerous and powerful. The push toward consolidation is only going to get greater in coming decade. And it could be that only the biggest survive.\n    \n\n            “It gets more challenging to survive and not have economies of scale if everyone else does, especially as you move into new technology,” he said. “When you’re in a highly competitive market, it tends to create partners that might not have happened otherwise.”\n    \n\n        New technology, billions in costs\n\n\n            The change from gasoline-powered cars to electric vehicles and self-driving technology, has already cost automakers tens of billions of dollars in research and development costs, and it will need tens of billions of dollars, if not hundreds of billions across the industry, more.\n    \n\n            The push to switch to EVs has been partly driven by environmental regulations that will make depending on profits from internal combustion engines more risky in the future, and partially driven by investor demand for stock valuations that match Tesla. And EVs have not been profitable for most automakers, other than Tesla and some in China.\n    \n\n            “The harsh reality the investments are not paying for themselves yet and it’s going to take longer than they had planned,” said Schuster.\n    \n\n            Although consumers have shown an appetite for driver assistance features such as auto braking and hands-free human-supervised highway driving, the promise of actually building true self-driving cars has proven elusive. GM recently pulled the plug on its robotaxi plans, citing the costs. Ford had dropped much of its self-driving development efforts in 2022. But Tesla and others are moving ahead with their self-driving plans  keeping the pressure on to develop the technology – even if on a more modest-than-anticipated scale.\n    \n\n\n\n\n\n\nA worker checking a car on a Nissan production line.\n\nRichard A. Brooks/AFP/Getty Images\n\n\n\n            The cost to develop those new technologies of will force more combinations and changes in the auto industry, said K. Venkatesh Prasad, senior vice president of research for the Center for Automotive Research, a Michigan think tank.\n    \n\n            And he said beyond the question of technological change is the increased competition from Chinese automakers, who had previously been limited to the Chinese market. The Chinese auto industry was barely a blip on the international radar 20 years ago, as Western automakers were dominant in China, the world’s largest auto market. Now the Chinese manufacturers are poised to be an international force. BYD, one of the biggest Chinese automaker, sold more than 4 million cars in 2024, a 41% leap from the year before, a far greater jump than any Western automaker. And well unlike legacy automakers which are still dependent on gas-powered vehicles for their sales and profits, well more than a third of BYD’s sales are EVs.\n    \n\n            So Chinese automakers are already shaking up the European market and are expected to eventually capture significant market share in North America.\n    \n\n            “I do think this is the tip of the iceberg,” Prasad said of the Honda-Nissan announcement. “These forces of powerful economic and technological change are accelerating the push to merge.”\n    \n\n            Prasad said he doesn’t know exactly which companies will get together, but he’s convinced there will be far fewer major automakers left on their own in the next five to 10 years.\n    \n\n            “There isn’t room for as many players in this world,” he said. “Maybe two in Japan, two in Europe, two  in the US. Maybe two in China. Going from twenty to eight, that’s a pretty significant reduction.”\n    \n\n        Many automaker deals fail\n\n\n            But other experts caution deals won’t be as easy as they might seem. Past auto mergers have not always worked out well. German automaker Daimler-Benz agreed to buy Chrysler Corp. in 1998, only for the combined group to be split up a decade later. The newly independent Chrysler went bankrupt and required a federal bailout within two years.\n    \n\n            Chrysler’s latest merger, with Europe’s PSA Group in 2021 to form Stellantis, has had its own problems in the last year, with falling sales and profits. And Nissan’s alliance with Renault, while not a formal merger, ended up collapsing following the arrest of Nissan’s CEO Carlos Ghosn in Japan over charges of “significant” financial misconduct. He fled the country before a trial could take place.\n    \n\n            There are also political forces that keep some combinations from taking place, said Peter Wells, professor at the Cardiff Business School in Wales and director of the Centre for Automotive Industry Research. Some countries would balk at allowing combinations of their national automakers with one from another country.\n    \n\n            Wells also notes that new entrants organically shake up the car market, with some eventually becoming major players in the global market, such as Tesla or BYD. Even Korean partners Hyundai and Kia are relatively new entrants compared to other legacy automakers, he points out.\n    \n\n\n\n\n\n\nMakoto Uchida (L), president and CEO of Nissan, and Toshihiro Mibe (R), director, president and representative executive officer of Honda.\n\nRichard A. Brooks/AFP/Getty Images\n\n\n\n            “It seems there’s always a discussion of further consolidation into five or six big players,” Wells said. “What confounds that is a couple of things, including politics in some regions and the emergence of new entrants who have tended to disrupt the consolidation process.”\n    \n\n            Some major players, such as Volkswagen or Ford, have ownership structures that would make a straight merger with other automakers difficult if not impossible.\n    \n\n            Two classes of stock at Ford give the descendants of founder Henry Ford effective control of the automaker. His great-grandson, Bill Ford Jr., is the current chairman of the company and it’s clear the Ford family is unwilling to give up that control.\n    \n\n            Volkswagen has about 20% of its shares owned by the German state of Lower Saxony, where it is based. That’s a likely roadblock to a full merger as well. So even though the two companies announced an alliance in 2018, they have not moved towards a true unification.\n    \n\n            So some of the combinations may come in the form of alliances, rather than a traditional merger.\n    \n\n            GM and Hyundai announced in September that they were exploring future co-development and production of vehicles, both traditional gas powered vehicles as well as EVs, as well as combined sourcing in battery raw materials, steel and other commodities needed to build vehicles.\n    \n\n            Wells does see the potential for more consolidation, particularly among Chinese automakers. And some existing legacy automakers are likely to get smaller as the part of the global market buying traditional gasoline powered cars continues to shrink.\n    \n\n            “We’ll see is a slow contraction of existing players,” he said, pointing to the brands and markets that automakers like Ford and GM have abandoned in the past 15 years.\n    \n\n            “We are already see evidence of that happening, with more plant closings, and ceding of market share,” he said.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2500194886"}