Ask the Car People.SM


Should Smaller Japanese Merge - Subaru, Mitsubishi, Suzuki, Isuzu - READ ONLY

78 messages,  Last post on Dec 08, 2009 at 5:24 PM

You are in the Automotive News & Views-Archives Forum.

Messages Page 4 of 8

#29 of 78 No. by ubbermotor

Feb 20, 2006 (1:49 pm)

Mixing troubled brands doesn't seem like much of a plan to me. I'm mean the whole Nash, Hudson, Studebaker, Packard merger plan turned out so well for all invovled.

#30 of 78 Subaru by varmint

Feb 20, 2006 (2:45 pm)

IIRC, Toyota only purchased a portion of the stake GM held in FHI. I believe it was 8 of the 12 percent. Toyota could not purchase more because of anti trust laws in Japan.
 
Furthermore, it is commonly held that Toyota had no real interest in FHI's Subaru car line. Toyota wants the battery technology owned by FHI (for hybrids) and probably wanted the extra production capacity at SIA. (Subaru has been losing money trying to run the Indiana plant at half capacity since Isuzu left.)

#31 of 78 Re: No. [ubbermotor] by varmint

Feb 20, 2006 (2:53 pm)

Replying to: ubbermotor (Feb 20, 2006 1:49 pm)
Exactly.
 
A good merger is one where the products of the two companies do not compete with one another directly. Mitsubishi, Subaru, and Suzuki are all car manufacturers priced for the mainstream buyers. Only Isuzu offers something different.
 
A merger where products compete is only going to work if it's not a merger at all. Rather, it's a take-over. But none of the four have anywhere near enough financial strength to take over the others.
 
And why would anyone want to buy Isuzu or Mitsubishi? That's like paying good money for a hole where you can throw away more money.

#32 of 78 Good Lord by nippononly

Feb 20, 2006 (3:40 pm)

a merger between these four might just be the most expensive way to lock four auto companies in a death grip that I have ever heard of!
 
Suzuki is actually a fairly strong company on the global stage - it just doesn't do things well that Americans like, which is why it is struggling here. Kei-class (600cc) and compact cars are its specialty, as well as mini-trucks. It has a strong presence in many places outside Japan with the Swift, a car they probably wouldn't dare try to sell here despite rumors to the contrary.
 
Subaru is still basically coasting on the success of its '01 line-up five years later, still the Outback/AWD company despite incursions into the AWD range by so many other companies, while it struggles to find an identity for itself.
 
Isuzu is basically a truck company, and Mitsu is historically the biggest seller of all, now fallen HARD because of all the corporate scandals in Japan and weak product.
 
Where in the middle of all that mess do we find the core elements of a successful merged company?
 
I doubt any of these companies are even in a position to merge - Mitsu is only quasi-independent, Subaru is a subsidiary of Fuji Heavy and is partly owned by Toyota, and Suzuki and Isuzu are ?????

#33 of 78 their executives will have to sit together and think by stevekilburn

Feb 20, 2006 (10:22 pm)

Replying to: nippononly (Feb 20, 2006 3:40 pm)
I think the executives of all these four companies will have to sit down "together" and think this through.
 
Platform sharing is not a bad idea among these 4 companies. And they can also pool their financial resources and engineering skills.
 
Infact, the small four could buy back GM's stake and as well as other outsiders and thereby the decision making process will be in their own hands rather than meddling by DC or GM.
 
But you might be right there is probability that it might not work.
 
But in auto Industry you have to take "calculated risks".
 
Remember NISSAN 7 years ago, there was only a 50:50 chance for survival according to Ghosn. And they succeeded in turning things around. They could have failed too.

#34 of 78 Re: No. [varmint], there are plenty of contradicting examples by stevekilburn

Feb 20, 2006 (10:29 pm)

Replying to: varmint (Feb 20, 2006 2:53 pm)
There are plenty of examples where products of companies did not compete and yet the merger/buyout failed.
 
BMW-Rover is classic example. There was hardly an overlap between BMW's high end sedans and Rover's mass market cars. BMW was also not making any SUVs at that time (back in 1997) and Land Rover was the perfect choice.
 
You cannot say BMW did not have good managers or lacked engineering depth or did not hav the money. Everything was there. According to Peichestrider, it was a match made in heaven.
 
BUT, it did not work.
 
Daimler-mitsubishi saga also speaks the same thing, although in this case I think DC spread out too thin and the big chrysler mess was also pulling them down.

#35 of 78 [ubbermotor] They will have to find a business case. by stevekilburn

Feb 20, 2006 (10:33 pm)

Replying to: ubbermotor (Feb 20, 2006 1:49 pm)
The Nash Studbaker Hudson era was different. It was just bad management and lack of good product. Besides, even after combining they were very tiny niche brands.
 
Mitsubishi has a decent line up of sedans, SUVs and even a truck.
 
Suzuki is big in small "mini" type cars and compact sedans.
 
Subaru can bring hybrid technology, AWD, quality control experience to the merged company.

#36 of 78 core elements of small four by stevekilburn

Feb 20, 2006 (10:39 pm)

Replying to: nippononly (Feb 20, 2006 3:40 pm)
You have very good point there. I mentioned these core elements before but I can write again.
 
The four brands will complement each other.
 
Subaru: Upscale Japanese models, Mercedes like. Emphasize safety, luxury, and little bit of performance.
 
Mitubishi: "Mainly" Performance oriented, like BMW. Eclipse, Evo, lancer etc.
 
Suzuki: Mainly economy no frills brand. Like Volkswagen in a way, but not exactly.
 
Isuzu: Truck/SUV specialist.
 
In fact I am shocked they did not try to look at the possibility of merger before. They can at the very least "EXPLORE" it.

#37 of 78 Re: core elements of small four [stevekilburn] by nippononly

Feb 20, 2006 (11:20 pm)

Replying to: stevekilburn (Feb 20, 2006 10:39 pm)
Eh?
 
"Subaru: Upscale Japanese models, Mercedes like. Emphasize safety, luxury, and little bit of performance."
 
Check out the interior of a Subaru sometimes - the Mercedes of Japan? It is so far off this mark it is not funny. Precious little luxury, performance is decent in some models. Safety? Stability control is only available on models over $30K! In Japan, Honda is leading the way in safety engineering right now.
 
Mitsubishi - performance? They have the porky Eclipse (3600 pounds for the V-6, what were they thinking?) and that's about it among the ordinary models. Yes they have the Evo, no there is not anything sporty about the rest of the Lancers.
 
I am not here to shoot anyone's ideas down, yet I find myself doing it anyway. These four would bring nothing to the table but a mess.
 
Subaru is trying to figure out how to increase sales from here. The Baja is bust, the Tribeca is not doing what they hoped.
 
Mitsubishi has lost its entire Japanese audience - some of those Mitsu officials went to jail, you know. The product line is awash in an ocean of mediocrity.
 
Suzuki and Isuzu are like scalpels - they perform one narrowly defined task very well - they are not enough to complement this group very much. So we have two companies excelling in one tiny thing and doing decently, and two full-line (almost) manufacturers struggling to maintain market share (losing global share in recent times, in both cases) as they try to figure out what they could possibly do to attain a significant upturn in sales.

#38 of 78 Subaru and significant upturn by stevekilburn

Feb 20, 2006 (11:56 pm)

Replying to: nippononly (Feb 20, 2006 11:20 pm)
Subaru executives want it to move upscale gradually. Thats why they released Tribeca, which has not been received well. But thats due to styling not the interior.
 
The interior is very upscale, not like mercedes, far from it, but nevertheless for its price its good quality.
 
I am not comparing Subaru with mercedes, I am giving a parallel.
 
Also you might be right in being so pessimistic, but we never know.
 
I think significant upturn can happen if they come out out nice designs and products. Pooling their resources will give them more muscle.

Messages Page 4 of 8

Advertisement

Browse by Category

Browse by Vehicle
   View All Vehicles

Browse by Board
Browse by Topic
View All Topics

Edmunds Community

Advertisement