George Denzinger wrote a comment in response to our 2043 predictions post that deserves separate treatment because of its length and focus.
As little as I cared for Sergio Marchionne’s proclamations, he was correct about the consolidation of the industry. Sergio was right, there are only a few major corporations that produce the majority of vehicles in the world. Fewer first-world countries want these kinds of industries and have no problem shipping them off to second- and third-world countries. Just as long as the execs in the first-world countries get their golden parachutes.
Many have criticized VW-Audi Group (VAG) for having 10 brands. By that same logic, Stellantis has an even larger problem than VAG, with 14 brands. I have a hard time imagining that Stellantis will be able to manage all of them without some serious pain in the near future. Stellantis CEO Olivier Francois has given the US branches 10 years to justify (my term) their existence. I could imagine that the only US companies left standing will be Jeep and Ram.
This is my own speculation, but I believe that in the next 10-20 years there will only be one manufacturer in Japan, Toyota. They’ve done a fine job of either conquering or co-opting most of their domestic competition. I have no doubt that Renault-Nissan-Mitusubishi will self destruct. Renault-Nissan’s record is not great and Mitsubishi being the weak man of the three is no help in getting rid of the French. When it goes really bad, I believe the French government will force Renaut to get out of the alliance one way or another. Honda will hold out the longest.
I suspect that Hyundai/Kia (HK) will continue to try to co-opt Japan, Inc.’s former position as the world’s default supplier of vehicles. China, Inc., has it’s fingers in everyone’s pie worldwide and would be reluctant to lose that influence. They are also trying to become the default supplier of BEV vehicles, not ICEs. Current legislation in the West will only heighten the demand for their vehicles. However, as other players, like Tata in India or Vinfast in Vietnam may also play into this.
I think Ford and GM survive, but as smaller entities. As long as they can crank out pickup trucks for North America, they’ll live on. They’ve already shrunken globally, especially GM, but there’s more to shrink. GM’s market share in China is shrinking (along with VAG’s, Ford’s and others) as the Chinese emphasize their own native manufacturers. I thought GM was positioned well with joint venture (JV) agreements with Shanghai Automotive Industry Corporation (SAIC). SAIC has quite a bit of influence, as it has agreements with GM, VAG and lists 10 brands. Where GM has shrunken in China, SAIC has grown. I expect this trend to continue, aided by the Chinese government. Ford may suffer a similar fate, as it’s position in China is even weaker.
Also see ‘Auto industry consolidation: Putting profits ahead of robust competition’
The Chinese market is the toughest to figure out. There are so many brands, so many JVs and government regulations involved in their business that it’s not easily comprehended. Eventually, the CCP will declare winners (big Chinese brands) and losers (Western JV partners, weaker Chinese brands) to force a consolidation quickly that may have taken decades. Then, off to conquer the world.
Recently, I saw a video of an Iranian-assembled car (Iran Khodro) that looked like any other car produced in Europe, North America or Asia. We here in the US are quite used to seeing autos from India or the Middle East that are usually 30 years out-of-date. With Tata able to purchase Britain’s Jaguar and Land Rover (and remain competitive with their native product) and Peugeot’s assistance bringing the Khodro’s line up-to-date, anywhere could be the next manufacturing hot spot. If the economics work out, you could buy your next car from Iran… Or Finland… Or Turkey… Or Thailand… Or South Africa… Or…
It’s definitely going to be interesting. I hope I’m around to see some of it. I also hope I’m wrong about a lot of this.
— George Denzinger
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Iran Khodro have some interesting history, it beginned to build a version of the Hillman Hunter known as the Paykan then the Samand and various Peugeot models built under licence.
https://www.curbsideclassic.com/blog/cc-capsule/cc-capsule-2007-iran-khodro-samand-persian-rugged/
There’s some interesting links in French about the Pars and the 405 RS, a Peugeot 405 being converted into RWD by using the Paykan drivetrain.
https://www.carjager.com/blog/article/peugeot-405-rd-et-roa-des-propulsions-et-on-ne-le-savait-pa
https://www.carjager.com/blog/article/peugeot-pars-petite-histoire-de-la-405-iranienne.html
Here’s a thought- I understand that the Buick nameplate is quite popular in China. See GM consolidating all its products under Buick, and then selling it off. Buick China goes its own way and Buick North America goes its own way too, off into the sunset. Alternately, Buick China having gone its own way exports its cars to the US, starting perhaps with some kickass BEV? Probably not. For most Buick owners, their next car will be a hearse.
Alpha males in flyover country will always want pickup trucks, so I see Ford and GM always being around for them, though an increasing percentage of them will be EV. Not sure about Stellantis surviving, and if it does it will be down to Ram and Jeep. Tesla will be around for the upper class and tech savvy all over the country. (Even where I live in Mississippi, I see far more Teslas than any luxury brand, though my personal observation is anecdotal and not based upon statistics.) Toyota and Hyundai-Kia will meet the needs of everyone else.