Industry Update: Company Ownership

Since the early 1900s, vehicle manufacturers have been buying and selling each other, trying to grow their combined business.  Some of these ploys work (GM buying Cadillac in 1909) while others fizzle out (GM buying Hummer in 1998).  In today’s uncertain automotive times, the Detroit 3 are trying to streamline their companies, to cut operating costs and slough off under performing brands.  In order to answer the question of whose product you’re really buying when you buy a car, truck or SUV in America, I will go into a little detail as to which companies are on the block, which have already been sold, and which are dying (or already deceased).

We’ll start with Chrysler, which has been in the news recently, following their arrival post-Chapter 11, and the subsequent purchase by Fiat.  While considered a purchase, Fiat only bought 35 percent of Chrysler Group, which gives them controlling interest, from Cerberus Group, which bought out Daimler in 2007 (Daimler makes Mercedez-Benz).  This includes the Chrysler, Dodge and Jeep brands.

Next up is GM.  Now labeled Government Motors by many people, they have been forced to cut Pontiac, Saturn, Saab and Hummer.  While Pontiac had a popular car in its G8 sedan, its other cars were far too close to their Chevrolet siblings.  Saturn lost its focus in the late 1990s, and Since the Ion was introduced in 2003, sales were on the decline, leading to GM trying to sell it off.  There was a deal in the works with Penske Racing, but an inability by Penske to secure manufacturing after the end of 2010, the deal was scuttled.  Saab has been sold to Koenigsegg, a Swedish company known for its ultra-low production supercars, and recently the Swedish government promised 400 billion Kroners (about $399 million US) to keeping Saab alive.  A deal involving Chinese company Sichuan Tengzhong – a heavy industrial machinery company – buying Hummer is still trying to be solidified.

Of the Big 3, that leaves Ford.  CEO Alan Mulally’s crystal ball must work, as in 2007, he leveraged part of the company to secure $4 billion in order to keep the company afloat, and in 2008, Ford sold Jaguar, Aston Martin and Land Rover in order to streamline the company.  Jaguar and Land Rover were sold to the Indian company Tata, which is notable because they produces a car there that sells for a paltry $2,500  US, called the Nano.  Aston Martin was sold to a British consortium, led by Prodrive and its owner, David Richards.  Ford also sold its controlling interest in Mazda, but should continue to share chassis designs, engines, and other small bits.

Now, knowing the companies in limbo, a little refresher as to which US companies are still holding on to others.  Ford continues to own Volvo – known to Americans as building some of the safest cars on the road – though recent reports suggest that Volvo is now up for sale.  GM is still producing Buick, Cadillac, Chevrolet and GMC vehicles.

So what does this all mean to the American car buyer?  It means that some of the marques, traditionally labeled as American, are either going to close up shop or be answering to new parents.  The companies currently in flux or already sold will be creating new vehicles, stopping production of some current vehicles, and possibly changing their entire corporate structure and focus, in order to further differentiate themselves from their corporate siblings.  You can already see this in Buick’s new lineup of crossovers and sedans.  Some of them might resemble Chevrolet or GMC’s vehicles, while others have altogether different appearances.

By John Suit

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