VW, GM and Peugeot-Citroën: Asian alliances
New ties for VW, GM and Peugeot-Citroen signal a way forward for the car industry HAVING weathered the storm, the thoughts of global carmakers are now focused on the tie-ups they hope will give them an edge in the upturn. Two such deals, the first involving General Motors and its Chinese partner SAIC, the second between Volkswagen and Suzuki, have been concluded in the past few days. Another, linking PSA Peugeot-Citroen and Mitsubishi, is still under negotiation. All three are aimed at winning a bigger presence in Asia and tapping into low-cost manufacturing expertise, while sharing components and development budgets. Of the three, the most significant is Volkswagen’s announcement on Wednesday December 9th that it has agreed to pay $2.5 billion for 19.9% of Suzuki, a family-owned Japanese maker of small cars and motorcycles. Along with Fiat, Suzuki is the only international outfit that knows how to make money out of small, inexpensive cars. That is something VW forgot long ago. But it needs to relearn it, argues Max Warburton of Bernstein, as asset-management firm, if it is not to suffer from the worldwide trend towards downsizing, as new emissions laws bite and growth shifts to poorer consumers in emerging markets. …
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VW, GM and Peugeot-Citroën: Asian alliances