General Motors is writing out the possibility of a merger or acquisition, even as the automotive industry is faced with upcoming evolutions that might change its face forever and certain rivals have called for further consolidation.
Just last week, merger-guru Fiat Chrysler Automobiles chief executive officer Sergio Marchionne again pointed out – as he already did on numerous occasions – that increasingly large expenses are needed to design and develop new models, which in turn yields slumping profits for each new generation of vehicles. He believes – and calls for – consolidation through purchases or mergers to generate the large-enough automakers that would be fit to survive. “We laid out a comprehensive plan that takes us through the early part of next decade,” commented GM chief executive Mary Barra when asked about her opinion on the matter. “We’re already in that top tier.” After decades of being the world’s largest carmaker, in recent years General Motors had to contend too second place and since 2013 Germany’s Volkswagen AG relegated the Americans to the third position.
The auto industry leaders have contended that the pace of change will accelerate for global powerhouses such as Toyota, VW, GM, Ford, FCA and others because of the non-traditional tampering from technology giants such as Google and Apple. “Whether its from a propulsion perspective, connectivity or new business models as we see new options in mobility, we have a plan for that.,” added the chief executive. Automakers are already altering their business models, as they expect further emergence of side business prospects – such as car sharing, Internet-related connectivity and features, as well as connected cars and, ultimately, autonomous vehicles.