5 Hot Auto Alliances and What They Do

The global auto industry is built on competition, but it also espouses collaboration. Manufacturers may prefer to do it alone, but managers know that it often takes two or more car companies to make some projects a reality. The consolidation that some believed would result in fewer manufacturers is not happening. Instead, automakers have created alliances with the goal to sharing costs, building new products and strengthening balance sheets. Let’s take a look at five hot auto alliances and what they provide to companies and consumers alike.

Renault-Nissan Alliance — The most well-known hook up is French automaker Renault with Japanese car manufacturer Nissan. In 1999, Renault bought a stake in Nissan and Nissan bought a slightly smaller stake in Renault. This arrangement has come because Carlos Ghosn, the CEO of both companies has bridged the cultural divide to make the alliance work. These companies remain independent, but share car platforms, powertrains and manufacturing facilities as needed.

Fiat-Chrysler Alliance — In 2009 with Chrysler facing a likely shut down, Fiat chairman Sergio Marchionne stepped in to rescue the American car manufacturer. Unlike Daimler, which bought Chrysler out in 1998 and sold it off nine years later, Marchionne understands the American persona and has made changes that have helped Chrysler not only survive, but thrive. Arguably, Chrysler is in better shape today than Fiat is with Chrysler benefitting from Fiat platforms to build hot new cars such as the Dodge Dart. Fiat is currently embroiled in a European market that is in a recession and dogged with overcapacity issues.

GM-Isuzu — At one time, GM held a 49 percent stake in Isuzu, a small Japanese manufacturer with a penchant for making excellent diesel engines. GM’s truck engines have benefited from this alliance as has its Opel unit in Europe. The upside for Isuzu is that it still is an independent company even as smaller manufacturers fade away or get absorbed by global manufacturers.

Hyundai-Kia — Hyundai has a 38 percent stake in Kia and both companies comprise the Hyundai Kia Automotive Group. Kia was bankrupt and in danger of going out of business in the late 1990s when Hyundai stepped in. Hyundai has turned a competitor into an ally, with both companies sharing platforms, powertrains and manufacturing capacity as needed. Together, the two companies are now the fourth largest car manufacturer in the world by volume.

Toyota-Tesla — By the numbers, the Toyota and Tesla Motors hook up is small change. However, Toyota has a stake in the American EV maker and is also benefiting from Tesla technology. The Toyota RAV4 EV has a lithium-ion battery system developed by Tesla and Tesla has the money to compete in market dominated by Goliaths.

Other Alliances

There are many other alliances at work in the world including GM-Peugeot, Ford-Toyota, Ford-GM and an assortment of Chinese manufacturers allied with western and Asian car companies. Some alliances are temporary while others are forged at the foundation and are likely to last for years on end, alliances of necessity and of strategic planning.

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Marketing Through Non-Competitive Alliances and Bundling

In harder economic times a business owner must look for more ways to reach more customers, since fewer people are buying and those that are expect discounts and are buying less. This dilemma makes life tough as less revenue is coming in, yet more marketing is needed. Advertising, branding, promotions, well all that costs lots of money; money that may not be in the budget as the company works to keep its head above water and its profits out of the red.

So, what is the answer to this challenge, as failure is not an option and making a mistake is unacceptable, indeed, it might cause the firm to go into bankruptcy. Well, these are all the problems we face, and thus, a solution is needed and in a hurry. Well, let me make a suggestion to you.

Find other companies that are non-competitive and create alliances by sharing customer bases and bundle services. For instance, a flower shop might bundle with a restaurant putting gift certificates in gift baskets. An air-conditioning company might give out discount coupons for appliances. An automotive maintenance company, might give out coupons to the carwash. This works very well, and if you find a company that can give a reciprocal coupon, it works even better.

Pool cleaners can share lists with landscapers, bricklayers with wood deck builders or cleaners. The sky is the limit and it takes a little thought, but it is definitely a way to bring in more business, network in the community and increase sales and hopefully prices. I’ve been doing this for decades, and always made money during the recession periods. Think on this.

Auto Alliance on Alternative Fuel Autos

Member companies of the Alliance of Automobile Manufacturers (Auto Alliance) started the celebration of the nationwide National Alternative Fuel Autos Week by announcing to the public that there are currently about 10.5 million vehicles with alternative fuel drivetrain traveling in the millions of roads across the US. Auto Alliance obtained the information based from the 2006 sales results provided by R. L. Polk & Co., the premier provider of automotive information and marketing solutions to the automotive world.

Dave McCurdy, president of the Alliance of Automobile Manufacturers
“There are 10.5 million Alternative Fuel Autos on the roads and highways of every state across the country. We are happy to see that consumers are, in fact, discovering the alternatives that are available to them on dealership lots nationwide.”

“We believe that the numbers of Alternative Fuel Autos on the roads continue to rise because consumers can choose from a variety of autos that reduce fuel use while still providing the utility, safety, performance and comfort they seek.” he added.

McCurdy continued and said: “Having exceeded our sales expectations in 2006, we hope that 2007 will be another banner year for sales of Alternative Fuel Autos. This year marks the first-ever National Alternative Fuel Autos Week and automakers hope to draw more attention to the availability of these autos currently for sale.”

To date, there are 60 vehicle models from domestic and international car manufacturers with alternative fuel capability are currently offered in the US market. These include hybrid electric, E85 ethanol capable, and vehicles with clean diesel engines. These alternative fuel drivetrain are available in different vehicle classes like sedans, SUVs, pick up trucks, and vans. Moreover, automakers are expanding the range of alternative fuel vehicles, and include new powertrain technologies for different segments. Probably, someday people can see an E85 ethanol capable convertible coupe model with VW cabrio parts from Volkswagen, which is an active member of Alliance of Automobile Manufacturers.

Along with the increasing development of alternative fuel vehicles, the Alliance of Automobile Manufacturers is also working in conjunction with the alternative fuel industry and the US government to expand the development of energy infrastructures in the country. Alliance of Automobile Manufacturers and their partners will conduct research and development projects for other energy sources like ethanol, biomass and hydrogen fuel.

Talking about the Alliance of Automobile Manufacturers, active member automakers of the alliance include BMW Group, DaimlerChrysler AG, Ford Motor Company, General Motors Corp., Mazda Motors, Mitsubishi Motors, Porsche, Toyota Motor Corporation, and Volkswagen of America, Inc.