Only six automakers will survive the worldwide financial downturn, according to Fiat CEO Sergio Marchionne. “By the time we finish with this in the next 24 months, as far as mass-producers are concerned, we’re going to end up with one American house, one German of size; one French-Japanese; one in Japan; one in China and one potential European player,” Marchionne told Automotive News Europe.
He said he believes the only way for an automaker to survive is if it makes more than 5.5 million cars per year. That would mean even his company, Fiat, would have to merge with another in order to remain viable.
“This business is going to be completely different. It cannot continue as it did in the past. Independence in this business is no longer sustainable.”
Potentially unstable automakers include those that are private or family owned, said analyst Jürgen Pieper. BMW , for example, is 46.6 percent owned by the Quandt family. Similarly, 30 percent of PSA/Peugeot-Citroen, is owned by the Peugeot family. Pieper said if the downturn continues, those families will likely try to sell their stakes in the automakers to protect their fortunes.
Pieper said BMW and Fiat are among the most vulnerable European companies. BMW CEO Norbert Reithofer recently stated his company is in the “biggest crisis in its history,” so it would appear Marchionne and Pieper make a valid point.
Of course, no one really knows how much worse the downturn will get. But if the problems deepen, consolidation might be the only route to survival. This is already evident in America, where there is growing pressure for GM and Chrysler to merge.
On the other side of the argument, some analysts point to the failure of the Daimler-Chrysler merger as a deterrent to future consolidation. But if smaller automakers collapse as the result of the growing financial crisis, the net effect could be the same — fewer automakers, each with larger slices of the market.
