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Wednesday, October 04, 2006


Au Revoir Nissan - Renault - GM

GM and Nissan/Renault announced today that they will be disappointing its largest shareholder, Mr. Kerkorian by not linking up. I don't consider this to be surprising. Nobody at GM wanted to deal with a gigantic merger and the potential loss of control.

GM apparently wanted additional compensation because Nissan/Renault would reap greater benefits in a link up. I recall, in an earlier life (Electric Vehicles) that GM wanted us (Ford) to pay a premium to form a JV on electric vehicles. Why? Because the EV1 was such a great hit. Our feeling at the time was that the Ecostar Electric Van had just as much promise for sales because it fit the duty cycle of many fleets. In the end, the alliance faltered...just as this one with Nissan/Renault.

Interestingly, the end of these alliance talks might signal the beginning of alliance talks with another faltering domestic car company. Ford has just hired a new CEO and continues to lose market share and profits. Chrysler Group is also beginning to struggle and has no volume presence in Europe and has never done well in Europe in the mainstream passenger vehicle business without a partner. Although Mercedes offers more entry level vehicles, it is still predominantly an upper end brand.

Anyone remember Renaults in America? Yes...in the 80s...as part of an alliance between AMC/Jeep. That alliance died in 1987, when Renault sold AMC to...Chrysler! That's how Chrysler acquired the rights to the Jeep brand. Renault left the US market, the largest in the world, in 1989.

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