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

stevekilburnstevekilburn Posts: 359
edited March 8 in Subaru
Mitsubishi is in big trouble and slowely crawling its way back. Subaru is not doing all that well either. Isuzu has been a disaster. Suzuki is doing well for a couple of years but its future is uncertain. As individual companies they are too tiny to make a difference. Should they merge, consolidate to make a difference?
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Comments

  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    I think they should merge with General Motors. They could share platforms and keep R&D costs down. I would love to see some of what GM has learned and what they've learned passed between each other. Hell Sabaru could help Saab out with it's AWD future and Mitsubishi could be a great segment for GM to get into the entry level market. Isuzu, could become a test market for diesel cars in the U.S. and Suzuki needs to make pocket rockets just like their state of the art motorcycles. My opinion, even though it's perhaps a wrong opinion. I just see some positives of a merge with a big corporation like GM who is also hurting and could use the R&D and diverse platforms of these manufactors. Isuzu is already owned by GM and yes needs some $$$$ pumped into them.

    Rocky
  • GM has already offloaded Subaru. It has its own huge healthcare and legacy problems. Besides GM is not good at dealing with insular Japanese Culture as its dealing with Subaru have shown.

    In fact rumors suggest that after Subaru GM wants to unload Isuzu as well.

    The US big 2, Ford and GM have lot on their hands already. Besides Ford has Mazda.
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    Ok I can agree with that. I however would like Mitsubishi to stay alive. Perhaps DC could buy them ????

    Rocky
  • Mitsubishi Motors sold its first vehicle in the U.S. in 1981, and began building cars here in 1988 at its
    manufacturing facility in Normal, Illinois. In 2002 Mitsubishi reached its peak selling 345,111 cars and trucks and in the process gained 2.1% market share.

    But after that it has been a perilious freefall. Several Senior executives have left. Daimler has offloaded its stake (except in Fuso truck unit) and Mitsubishi is beset with problems.
  • DC could not make it happen. It had 37% share at one point. Now its zero.
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    So basically they are dead.

    Oh well, perhaps someone will step up and buy them ???? Maybe Toyota or Honda ???

    Rocky
  • 1982 5260
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    1997 189163
    1998 190515
    1999 261254
    2000 314417
    2001 322393
    2002 345111 market share 2.1% peak.
    2003 256809
    2004 161609
    2005 123995 market share 0.73%. DISASTER.
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    Well they really haven't had any desirable gotta have vehicles in years. Mitsubishi has kinda gotten bland.

    Rocky

    P.S. I guess except for the Eclipse which isn't a runaway bride winner ;)
  • socala4socala4 Posts: 2,427
    Unlike GM and Ford, both Toyota and Honda have avoided acquisition strategies. Aside from buying these smaller firms to keep at bay, I can't see why either company would bother changing that strategy just to acquire some minor brands with little or no potential. If VW wasn't having its own woes, I could see it attempting to eventually make a play for Subaru -- it has also been buying up smaller brands, and Subaru and VW have some similar appeal in North America -- but it's probably too cash-strapped at the moment to chase down new acquisitions.
  • You are right aquisitions of these smaller Japanese quartet, either one or more is risky. Infact,

    Subaru: Sold by GM
    Mitsu: Sold by DC
    Suzuki: GM reduces stake to 10%
    Isuzu: GM reducs stake to 10%.

    Its better that the four should merge together.
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    How about BMW ????? They perhaps could use another project to add some flavor and market share. Who owns BMW ????? I though Ford had a stake at one time into BMW in the early part of Y2K. Do they still ?????? ;)

    Rocky
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    I was actually pissed at GM for off loading Saburu. They have a niche that GM doesn't have at the momment and that's how to build turbo cars with good handling w/ AWD. Saab is yet to convince me they can do it without charging a arm and a leg. ;)

    Rocky
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  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    GM's best merger would be to acquire BMW. However I have more confidence if BMW would call the shots.

    Rocky
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    Perhaps you are right they all need to merge. Who do you put in charge ?????

    Rocky
  • 2002: 180020
    2003: 186819
    2004: 187402
    2005: 196002 (Best year ever, but still very vulnerbale due to just 1.2% market share)
  • They should either choose someone competent within the ranks of Subaru, Mitsu, Suzuki and Isuzu, or hire some bright talent from outside these four companies.

    Subaru + Mitsubishi + Isuzu + Suzuki = Consolidated Company with market share of more than 5% would be a good idea.

    It will allow them to share platforms, share parts-bin, share manufacturing and marketing budgets etc etc.
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    well 2005 is a strong year for a niche company. If GM didn't have these finacial woes perhaps they would of kept Saburu around. Subaru knows AWD and turbo boxter engines and is probably the best out of the bunch at knowing what customers like. They just have never had the finacial resources to take risks to make themselves grow into a solid company like BMW or Porsche.

    Rocky
  • rockyleerockylee Wyoming, MichiganPosts: 13,989
    Well hire the V.P. of Honda or Toyota since all are Japanese company's. I'm sure one of them would be willing to take on the job and use what they've learned at their successful company's and apply it to the merged. ;) For the Big 3 sakes I guess I hope they flounder like the Titanic. :P

    Rocky
  • Merger of these four will provide them with more financial resources and economies of scale.

    They will pool their resources together to make better products.
  • In the merged four:

    Subaru can assume the role of the upscale brand. = Something like Mercedes but more value for money.

    Misubishi: Can be their performance brand: Like BMW. They can complement Subaru.

    Suzuki: Can be their economy brand = Like Volkswagen.

    Isuzu: Can be truck and SUV specialist like GMC.
  • LOL! Actually they will not have much overlap with GM and Ford as their customers will come from other Japanese brands.
  • When it comes to the financial situation, GM is certainly no better than Mitsu. Actually, the GM can no longer afford to buy the smaller Japanese even if they want to. The same can be said for Ford or DCX, period.
  • logic1logic1 Posts: 2,433
    Actually, the GM can no longer afford to buy the smaller Japanese even if they want to

    GM has about 25 Billion in cash reserves.

    How much do you suppose Mitsubishi is worth? I dare say not more than around 5 billion.

    Heck, GM and Suzuki bought Daewoo's auto operations for just around 1 billion.
  • logic1logic1 Posts: 2,433
    Subaru: Sold by GM
    Mitsu: Sold by DC
    Suzuki: GM reduces stake to 10%
    Isuzu: GM reducs stake to 10%.


    Where are you getting these figures?

    First, Subaru was and always has been a part of Fuji. GM owned around a 12% stake in Subaru. It sold the stake to Toyota. Toyota has now, I understand, increased its stake in Subaru and made some other partnership arrangements with Fuji.

    GM's stake in Suzuki is closer to 20%. Far as I know, GM has not made any changes with Suzuki lately.

    GM sold the majority of its stake in Isuzu several years ago. I believe the percent GM owns now is less than 8%.
  • And GM's debt totaled more than US$300 billion as of last year. :P
  • 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.
  • varmintvarmint Posts: 6,326
    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.)
  • varmintvarmint Posts: 6,326
    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.
  • nippononlynippononly SF Bay AreaPosts: 12,692
    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 ?????

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

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