The new three-way partnership of Nissan Motor Co., Renault SA and Daimler AG should help grease the rapid transition to a new age of eco-friendly cars. The Franco-Japanese auto alliance and the German carmaker announced their comprehensive capital and business tie-up on Wednesday.
Two inescapable trends facing the auto industry in the 21st century are global warming and the growing economic power of emerging countries. This three-way alliance is the latest move in a wave of global consolidations sweeping the industry as its members search for ways to stay afloat.
Last year, the Volkswagen AG and Suzuki Motor Corp. alliance topped the world's largest carmakers with sales of 8.6 million vehicles. The Toyota Motor Corp. group came in second worldwide with sales of 7.81 million units.
Nissan-Renault and Daimler together would have grabbed the third slot with combined sales of 7.64 million cars.
Competition in the auto industry will now be defined largely by fierce battles among these three behemoths, along with fourth-ranked General Motors Co. of the United States, which sold 7.48 million vehicles globally.
The auto industry is the symbol of mass production, and there is a natural tendency to seek economies of scale.
The race to develop new environmental technologies and control bigger chunks of the world market are providing additional fodder for carmakers' appetites for expansion.
In the industrial world, which comprises Japan, the United States and Europe, the auto industry faces the urgent challenge of responding to tighter fuel economy regulations that will take effect in the 2020s and are aimed at helping push back the harmful effects of climate change.
But developing and manufacturing hybrids, electric or fuel-cell vehicles, as well as compact cars, requires huge investment.
Since the burden of such investment is too heavy for individual carmakers to bear on their own, forming alliances is inevitable.
Forging tie-ups to control a larger share of the world market is important for automakers if they wish to reap maximum benefits from the sharing of parts and from new technologies.
Size also puts an automaker at an advantage when in negotiations to buy technology from a rival.
The three-way alliance of Nissan, Renault and Daimler is designed to serve both offensive and defensive purposes.
Daimler, whose product portfolio is tilted heavily toward midsize and large vehicles, wants to use Renault's technologies for small cars, as well as Nissan's technologies for electric cars and fuel cells.
The Nissan-Renault team is keen to acquire Daimler's advanced diesel engine technologies.
The three carmakers apparently hope to form a mutually complementary relationship.
This tie-up is a loose alliance based on mutual holdings of small stakes, not a merger or acquisition in which a bigger fish swallows a smaller one.
A decade ago, the auto industry was gripped by a merger and acquisition fever, when the end of the Cold War triggered a boom in economic globalization.
In 1998, Daimler merged with Chrysler Corp. of the United States. But that combination was dissolved in 2007 because the two parties failed to mesh their organizations and operations.
The lessons learned from that failed merger, which had created an entity too big to be managed effectively, are apparently reflected in recent moves by some carmakers to cooperate over strategic challenges, such as in environmental concerns and emerging markets, while retaining their independent managements.
Toyota, for instance, has agreed to provide hybrid technology for Mazda Motor Corp. A Chinese automobile maker bought Volvo from the U.S. Ford Motor Co., and GM has sold to another Chinese car manufacturer the rights to technology from its Saab unit.
South Korean carmakers may also make similar strategic moves.
The landscape of the global automotive industry will continue to undergo radical adjustments for years to come. We hope these changes will accelerate the shift to a low-carbon future.
--The Asahi Shimbun, April 8