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

13

Comments

  • varmintvarmint Posts: 6,326
    The big 3? Right now, we're plagued with too much production capacity, large volumes of debt, products that Americans don't want to buy, and a reputation for being inferior. What we need to do is to put ourselves deeper in debt buying up little companies who also have extra capacity, large amounts of debt, products that Americans don't want, and a reputation for being inferior.

    Toyota? Yeah, they need "help" from other companies. The only reason for Toyota to buy Mitsubishi or Isuzu is to administer a mercy killing. They already have what they want from FHI. And Suzuki isn't doing anything they can't do on their own.
  • nippononlynippononly SF Bay AreaPosts: 12,669
    is not going to be interested in Suzuki when it already has Daihatsu. Isuzu, maybe, for diesels, but I heard there was already a partnership in the works for diesels.

    Honda isn't big enough (even though it is a big seller in the States, it is really a fairly small car company in Japan) to contemplate taking on acquisitions or partnerships in this group.

    And Nissan is already merged with Renault, with the French calling the shots. I can't imagine they are going to have much interest.

    Chrysler is controlled and owned by the Germans, who just divested themselves of Mitsubishi. Clearly, they will not be doing anything. Ditto GM, which just divested itself of Subaru and spent a ton of money avoiding being lumbered with Fiat. No way. And Ford is struggling with the billions of dollars it is already losing on its foreign acquisitions, namely Jag and Land Rover.

    These four will have to struggle on alone, and I suspect that one or more will dissolve away to nothing in the next decade or two. Best bet for that outcome: Isuzu.

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

  • socala4socala4 Posts: 2,427
    Except for your betting on Isuzu, I concur with your assessment -- very nicely done.

    My money would go on Subaru, it does a very good job of serving a niche market for reliable AWD cars at a reasonable price, and has a performance winner with the sport versions of its sedans. If it had the cash to buy it, I'd bet on VW being the best corporate master for this brand, but VW is hurting too much under the weight of mediocre sales, reliability concerns and the budget busting failure of the Phaeton to possibly consider this.
  • bumpybumpy Posts: 4,435
    These four will have to struggle on alone, and I suspect that one or more will dissolve away to nothing in the next decade or two. Best bet for that outcome: Isuzu.

    I don't know about that. Isuzu is all but extinct in the US, but is doing fine elsewhere. In a lot of ways, they're the diesel/truck version of Honda. Isuzu, Suzuki, and Subaru have good enough niches to survive as smallish builders if they can avoid the pitfall of trying to be everything to everyone.

    Mitsubishi is the tricky question: if they can successfully establish themselves as the straight-electric/performance-hybrid marque, they may survive. If they try to continue as a "regular" automaker, their days are numbered.
  • logic1logic1 Posts: 2,433
    It would also mean pooling debt.

    Mitsu has debt problems. Isuzu might, don't know. Suzuki is famous for running a very tight ship. It is a solvent company. It is very competitive in its market. It just happens Suzuki's market does not have a big North America following.

    As said above, Subaru is part of Fuji Heavy Industries. Fuji is a very solvent company. Not sure why it bothers with cars, as it does not seem too interested in them. But it is not saddled with debt.

    In order to accomplish a merger, they would have to spend billions in terms of legal fees alone.

    A Japanese merger is not going to be cheap, but it is not going to cost like a US merger.

    My objection to the merger is that Suzuki is doing just fine, Subaru is part of one of the world's largest companies, and Isuzu and Mitsu do not seem to have much to offer anyone else.
  • varmintvarmint Posts: 6,326
    Yes, I agree. Suzuki probably should not be included in such a blanket statement. Also, Subaru's financial condition really wouldn't be all that bad if it hadn't been for a bad break up with Isuzu.

    I do not agree with your picture of FHI, though. Everything I've ever read (one example) suggests the automotive branch of FHI wears the pants in that family.

    There are quite a few companies with the name "Fuji" in the title. They are not necessarily parts of FHI.
  • yeah, they are ok, and in fact, they are about the only company making some money for GM right now, besides GM-DAT, of course, and Suzuki has a part ownership in that.

    Suzuki has been here since 1985, and they hit their highest sales numbers ever, over 84,000(?) saels, and they said that was good. If they have not "failed" with lower numbers over 20 years, and doing well overseas, maybe USA sales are "just gravy", then, for them, otherwise, they would have went the way of Diahatsu,Renault, and others, that were once in USA.

    who knows? they may even break that illusive 100,000 units sales.

    Anyhow, they are ok, but their dealerships are awful :sick:

    I like the eclipse. That is all.
    I read a rumor that a Chinese maker was looking at buying into(or all?) of Mitsubishi.
    Just think, a 25K eclipse(now) could be 18K! How many 263HP V6's, 0-60 of 5.5 seconds, @18K msrp, would fly off of the lots? Even at 20K.

    At that price ya could afford the gas/26MPG only for the V6.

    I do not know, though. If they went an sold only specialty cars, liek the Eclipse, the Lancer EVO, and that electric hyrbid stuff for a car or two....they have a slight chance.

    As one person here siad, if they try to be a regular dealer, they could fail.

    Subaru used to have the AWD cars market almost completly to themselves. Not any more.
    And they are overpriced.
    If they fold, I won't lose sleep.

    Isuzu? Tey were big in 1988.
    I had an isuzu _iMark, that was rebadged as a Chevy Spectrum. Good for about 14 months. Nice car. After that....forget it.

    They should have folded years ago. they tried a 10/120K warranty, and it failed. They now has 7/75K?
    What's that about?
    They should have left years ago.

    Maybe Mitsu should just sell a 3 and 5 door(stretched) version of Eclipse, and lancers? :confuse:
    Sell them 2-3K less(for Eclipse) than now. Do like Suzuki. Can survive on 75,000+ units sold per year, or else.
  • rockyleerockylee Posts: 14,011
    Mitsubishi is the tricky question: if they can successfully establish themselves as the straight-electric/performance-hybrid marque, they may survive. If they try to continue as a "regular" automaker, their days are numbered.

    Bumpy isn't Mitsubishi getting Japanese government help to stay afloat ????

    Rocky
  • prosaprosa Posts: 280
    It's strange, but I can see Subaru and BMW doing very well together in some sort of partnership.
  • Actually BMW and Honda would be a better prospect. Besides this discussion is about merger of

    (Subaru + Mitsu + Isuzu + Suzuki) = Single company.
  • I dont think they need govt help. The combined Japanese company of small 4 can borrow money from independent financial institutions
  • I dont think they should aim low. All four should aim at at least 1-2% of market share in US so they compete with other big asian players like Toyota and to some extent Hyundai.
  • I dont think it will be billions in legal fees. That would be a world record.

    It could be a few millions. Which is affordable.

    Every troubled automaker does debt consolidation. So I dont see that as a problem.

    I think they just have to put their mind to it and just do it. They have to be a little bold like us Americans and go with the idea with strong passion.
  • Cash is never a problem. The financial markets are awash with dollars. They can just borrow whatever is necessary and then get the ball rolling.

    And hire a good manager who can manage the merged small-4 with vision and energy.
  • I think marriage is the best way. It will provide stability in the long term. The merged-4 should focus on a product led recovery. Product is always what have to focus on

    The costs of closing plants, redesigning etc etc are just part of the process to fix the problem. So what you are stating as problems in the way of merger are actually exactly the things they will do after merger which will be good.
  • bumpybumpy Posts: 4,435
    isn't Mitsubishi getting Japanese government help to stay afloat ????

    Sorta. They've had a series of cushy loans from various Japanese banks, which in that economy constitutes thirdhand government assistance. Even so, that's not going to save Mitsubishi's export markets by itself, and they're not a big enough player at home to survive in the same shape without them for long.
  • rshollandrsholland Posts: 19,652
    If Subaru, Suzuki, Mitsubishi and Izusu were to merge, there would have to be a radical realignment and axing of products, so that whatever products were produced, none would step on the toes of other products.

    Here's what I would propose, using that scenario:

    • Subaru to concentrate on mid-size and larger cars; anything over 2000cc.

    • Subaru and Suzuki colaborate on cars under 2000cc.

    • Mitsubishi to drop their all car lines, as they would compete with the Subarus and Suzukis.

    • Izusu and Mitsubishi concentrate on trucks and SUVs (large and small), and diesel engine development.

    ____________________________________________________

    Do I think it might be a good idea? Possibly.

    Do I think it will happen? Very unlikely, at least not until the powers that be realize that it would be in everyone's interest to do so.

    The BIG question is: what would each company being willing to give up to make it work?

    • Would Mitsubishi and Suzuki be willing to drop their car lines? I doubt it.

    • Would Subaru be willing to drop their sub-2 litre cars? I doubt it.

    • Would Subaru being willing to share their boxer engine and AWD technology with other members of the group? I doubt it.

    • Would Subaru be willing to drop boxer engines, if it would benefit the group? Never happen.

    • Would all of these manufacturers be willing to concentrate on very narrow product segments for the betterment of the whole organization? Very unlikely.

    I think there will be too much in-fighting and pushing of individual agendas for this to work. I can only see it happening as a last ditch effort among all those companies mentioned.

    Finally, who would run this group? Somebody from FHI (or any of the othe groups)? Do you think that would sit well with the others? Someone mentioned a takeover earlier, and I think that would be the only way to pull this off (so that there's it's "clear" as to who is in charge), but who among this group has the resources to do that?

    Bob
  • harrycheztharrychezt Posts: 405
    After rethinking it over, I concur, agree, etc..
    Mitsubishi does have a few nice cars, like EVO and Eclipse.
    Suzuki sales are still rising to record levels, for them.
    They are ahead of Mitsubishi, actually!
    Overseas, I think Suzuki sells more vehicles than Mazda and BMW, even(I once read).
    If current levels of sales keep going on at Suzuki(plus, they have an SX4 or something coming out in fall, small suv-car thing) they could finally break that 100,000 units sold barrier(in a year).
    That would be cool. Next year, I read on future models, there will be a Sporty Sedan(no name yet) and a sporty Reno coming out(in 07?).
    A Reno with say maybe even 142 HP(like Cobalt? GM and Suzuki are partners, GM has about 20% stake in Suzuki) and 34MPG would help.
    If they drop this 155HP I-4 that is currently in the Aerio(read it will go away, for this upcoming SX4?) into the Reno, and keep MSRP (loaded up) under 18K.... I would be Very interested, indeed!
    Subaru? I still think due to more companies using AWD(Dodge Caliber, Suzuki Aerio sedan/wagon, and the upcoming Jeep Compass,etc), they are losing gorund due to others copying the idea of awd cars.
    Still not 100% sure about them.
    Isuzu? I may see one at the autoshow in a few weeks, the newer trucks.
    I owned an Isuzu I-Mark, rebadged as a Chevy Spectrum , from Aug of 87-to june of 90. Nice car for about 14 months, then after that, brakes needed replaced at 14K miles(mainly highway), master cylinder at 13K, and it got worse from there.

    Mitsu could sell cars here and make money, and it seems Suzuki has a new found popularity, since sales are higher than back in 1988,(or 05, even) when they were at a previous high point.

    I agree, if they are going to try for sales, go for the moon! Act like they are trying to hit 1 million sales, and maybe they will gain more customers?
  • I started this discussion as a purely hypothetical one more than a month ago. But I cannot believe the recent developments:

    It is simply amazing.

    GM has recently sold almost its entire stake in Suzuki and just yesterday the news is that it is negotiating with Mitsubishi to sell its stake in Isuzu.

    Now the merger of small-4 is a real possibility.
  • Who could have forseen in their wildest imagination that this merger would be possible and that GM would readily divest itself from these overseas colonial posessions in such as short span.

    But the most important challenge is to figure out whether the small-4 really have the vision to put this merger into place and give toyota some strong competition.
This discussion has been closed.