There are two schools of thought with regards to car company merger-takeovers. One is that the two companies cars’ are in different market segments so there is little cannibalisation of each others market share. This describes the marriage of DC. There is little scope for savings; sure you can merger HR departments, marketing and IT but the really big savings come when cars can share platforms and parts. If Daimler parts where used in Chrysler, they would drive up the price of Chrysler cars, the other way round; they would cheapen Mercedes cars’ (and not just in price).

Little scope for sharing; little scope for big savings.

Renault-Nissan merger typifies the other type of merger where both companies compete together at many levels. They merge the hidden bits of the cars, bringing massive savings in design and manufacture with little loss (if done with intelligence) in the individual cars’ characters and distinctiveness.

Mercedes and Chrysler couldn’t make those savings, but the real disappointment is they couldn’t look at their own strengths and successfully pass those on to their partner. Chrysler could teach Mercedes about flamboyant design, and bringing a concept to the market with fantastic speed. And could try and learn how to build quality into cars, avoiding cheap looking interiors, and making cars profitably. The fact that seemingly none of this knowledge was communicated is a massive failure of management. These should have been identified right from the beginning and prioritised. Instead mutual mistrust, lack of respect and barricading was allowed to foster. Divorce was inevitable. The result is that Daimler has effectively paid someone to take Chrysler off their hands. Echoes of BMW-Rover? Yes, the similarities are many and great. DC couldn’t even see and learn from BMW woes and mistakes…..but maybe they did: BMW have taken a big step forward since similarly paying someone to take Rover.

Return to Amistad Home.

This article is sponsored by Proqul Ozone store who supply the Ozonology Sanitisation service.

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