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How globalization 3.0 is fueling change in the auto industry

With “globalization 3.0" beginning around 2000, we saw a much more rapid acceleration of consolidation between companies. One of the first was the buyout of the American corporation Chrysler, by Germany’s Daimler-Benz in 1998. This purchase was the largest industrial merger in history, making Daimler Chrysler the fifth largest car producer in the world at the time. This merger was shortly followed by Ford Automotive and their buyout of Sweden’s Volvo A.B in 1999. These were but the precursors to a new automotive industry which is beginning to be seen and felt today. As globalization climbs towards “4.0" and beyond, companies will go from tiny to microscopic, and no doubt in the end there will be few.

On a personal note

Years ago my father predicted these company consolidations and shrinking borders between their international counterparts. In many ways those talks always kind of frightened me but I knew he was correct on many of his points. My father worked as a designer for General Motors and Ford in the early seventies. I have heard more than my fair share of horror stories from him about company policy for downsizing and trying to save money anyway they could. Most disturbing was their want to have him purposely take safety features out of cars, remove bolts that prevent wear, and many other things I would consider “shady” from my own moral beliefs. I believe that choices like these put them on the path for shortcuts and outsourcing that helped built some of the foundation for globalization. They like many other companies no doubt will experience what “globalization 3.0" will come to mean in the next few years.
       
Bellow is a list of shares companies hold in rival companies, which might be used for future merger forecasting

* Porsche holds a 20% stake in the Volkswagen Group (30.97% voting rights), as of 2006-12-31.[6]
 * The Renault-Nissan alliance involves two global companies linked by cross-shareholding, with Renault holding 44.3% of Nissan shares, and Nissan holding 15% of (non-voting) Renault shares.
 * Ford holds a 33.9% stake in Mazda.[7] and an 8.3% share in Aston Martin.
 * Hyundai Motor Co. holds a 38.67% stake in Kia Motors.[8]
 * Daimler AG holds a 19.9% stake in Chrysler Holding LLC.[9]
 * General Motors still holds a 3% stake in Suzuki. Suzuki is also partner with GM in GMDAT and CAMI.[10]
 * The Volkswagen Group holds 68.6% of the voting stakes in Scania.
 * Renault holds 20.5% of the voting stakes in Volvo Group.
 * Toyota holds a 51% stake in Daihatsu hence having a controlling interest in the company, and 16.5% in Fuji Heavy Industries, parent company of Subaru.[11]

Information above was taken from Wikipedia, copyright belongs to them and their rightful owners.
 

    Sources-

[Wikipedia.com]
[http://query.nytimes.com/gst/fullpage.html?res=9401E4D91638F933A05752C0A96F95...]
[http://www.wsws.org/news/1998/may1998/merg-m8.shtml]
[http://globalpolicy.igc.org/socecon/tncs/mergers/2499automergers.htm]
[The World Is Flat
| Thomas L. Friedman]

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How cultural differences make it difficult to create a world car.

In a world so culturally different it’s hard if not impossible to build and market a global automobile. Every culture has it's own needs, wants, and aesthetics they will look to when purchasing a car. Perhaps it’s impossible now, but one day we might be culturally syncopated enough to where such a thing could come to pass. Examining every culture would take a lifetime so instead I will raise a few points. First you must examine the economics to see what a specific region can afford, how much they drive, gasoline prices, and then even the look and size of the car. It is hard to say how many of these requisites one must fill to appease one geographical location, but there are many people trying.

France for instance is working on a solution to the problem, which is supposed to be introduced next year to the European and Indian market. The first model is a small two door car, powered by electric, gas, and wind power. This model boasts 250 miles a gallon and is supposed to hit the European market at  €6,000. There is also a larger six cylinder version, if it does well in other markets it will also possibly be introduced to the American market. One must wonder how such a car would do in the American market with so much of America's infrastructure in oil, and it's people's love of large inefficient cars. None the less, it’s maybe as close to a global car as people may see for some time. After all it's small, fuel efficient, sleek, and inexpensive. These four elements might bring it close enough to a fair amount of cultural needs to at least be a runner up.

 

Other sources -

BBC America TV
Link TV

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