Shakeout Threatens To Rearrange Auto Industry

Indianapolis Star ^ | November 30,2003 | Ted Evanoff

[John W]

DETROIT -- Not since the 1920s have American consumers had so many choices when shopping for a new car or truck.

Twenty-one American, British, German, Swedish, Japanese and now South Korean automobile companies offer 41 brands comprised of more than 1,000 car and truck models in total.

[Willie Green]

The global automotive cartel consists of only 5 companies: GM, Ford, Daimler-Chrysler, Toyota and Volkswagen.
While there may be a few, inconsequential independents left, most other automotive nameplates are already ensnared by one of the Big Five through partnership joint-ventures or major equity holdings of their stock.

[staytrue]

"I could see a situation where we get down to six or less" automakers by decade's end

I disagree. There are advantages to being big, like economies of scale. But there are advantages to being small, like flexibility, innovation, nimbleness, less bureaucratic inertia, etc. The result of these two forces results in a size that is not too big and not too small. As the world population has increased, there is more room for more independent auto makers. A world with 3 billion people needed maybe 5-6 car makers. A world with 6 billion has room for maybe 10-12 car makers.

I think you can add hyundai, nissan, a chinese car company, an indian car company, and maybe honda to your list of survivors.

[Willie Green]

The capital investement requirements of automotive manufacture will provide the Automotive Cartel with economies of scale that will serve as an impenetrable barrier to market entry for any competitive start-ups. There will, of course, always be a niche customization market where "innovators" can make alterations to stock units. But the bulk of the vehicles and their components will still be controlled by the cartel.

[dirtydanusa]

Once the Chinese are allowed to build and sell Cars in the U.S., these companies will all go the way of the television, computer, and every other product we used to manufacture here. I can see it now., "Made with Pride in China".:>)