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Japanese carmakers might merge to become a new 'big 3'

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http://www.bloomberg.com/apps/news?pid=206...&refer=asia

This shows the level on which the Japanese makers work together (and attack our domestics together) as opposed to being in constant irrelevant competition. (like the big 3)

I wonder how this would pan out...

All 10 of the Japanese automakers are going to join under one banner, and with their new found power they will crush the American auto industry! At least that's the scenario that's running through your head, am I right?

The CEO of Suzuki believes that some of the smaller automakers will get purchased by the larger ones, as sales fall further next year. This is concerning only the Japanese domestic market. Their market is far more competitive than here, as there are 10 different companies vying for a much smaller market share, and most of the market share is in one segment of vehicles, minicars. They are not working together any more than GM was when it purchased the various brands it owns.

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All 10 of the Japanese automakers are going to join under one banner, and with their new found power they will crush the American auto industry! At least that's the scenario that's running through your head, am I right?

Nope...

Actualy, I'd like to see some of the small players eliminated (Which is what I think the end result would be)

But the fact that this is being openly discussed illustrates one reason why Detroit is losing the war. Our companies can't even band together on a marketing venture. Yet, the Japanese companies are smart enough to see the writing on the wall and are already 'discussing' a solution.

FWIW, I don't really see a full consolidation happening. But I think the weaker companies will start to fail (namely Suzuki, Isuzu and Mitsubishi)

The CEO of Suzuki believes that some of the smaller automakers will get purchased by the larger ones, as sales fall further next year. This is concerning only the Japanese domestic market. Their market is far more competitive than here, as there are 10 different companies vying for a much smaller market share, and most of the market share is in one segment of vehicles, minicars. They are not working together any more than GM was when it purchased the various brands it owns.

Actually, there aren't 10 companies; most I can come up with is 7 and 3 of those have significant foreign ownership and (albeit, that might change very soon) Best I can figure is that the article is counting some 'captive' units as "manufacturers"

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Nope...

Actualy, I'd like to see some of the small players eliminated (Which is what I think the end result would be)

But the fact that this is being openly discussed illustrates one reason why Detroit is losing the war. Our companies can't even band together on a marketing venture. Yet, the Japanese companies are smart enough to see the writing on the wall and are already 'discussing' a solution.

FWIW, I don't really see a full consolidation happening. But I think the weaker companies will start to fail (namely Suzuki, Isuzu and Mitsubishi)

Actually, there aren't 10 companies; most I can come up with is 7 and 3 of those have significant foreign ownership and (albeit, that might change very soon) Best I can figure is that the article is counting some 'captive' units as "manufacturers"

Suzuki says that Japan's auto industry consists of over 10 companies. I'm sure several of them are very small and we have likely never heard of them. I'm just going off what he said, cause I don't really know.

I don't see anything that says the Japanese automakers are in discussion or thinking about banding together. At least based on this article, it is only the CEO of Suzuki saying he thinks the companies may consolidate into a 'Big Three'. What does that mean? Well it doesn't mean anything, at least until multiple representatives from the various automakers are quoted as saying specifically that they will be cooperating with each other.

If there will be any consolidation, you can bet it will be in the form of the larger companies buying out the smaller brands whose stock prices have plummeted and are vulnerable.

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Suziki, Mitsubishi, and Isuzu can fail IMHO...none of them bring that much to the table in terms of product, other than the EVO.

And you can't build a long term business on a low volume sports car unless your Lotus, Ferrari or Morgan.

...and last I checked Mitsu ain't Ferrari.

Chris

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Remember though, the 3 you mentioned all produce products outside the realm of passenger cars... Suzuki with motorcycles, mitsu with electronics, and isuzu is pretty involved with heavy duty vehicles iirc...

Edited by Nick
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Don't confuse Mitsubishi Motor Industries (Mitsubishi Jidosha Kogyo) with any other Mitsubishi company (there are a lot). There is only a tenuous relationship between the different companies at present, although Mitsubishi Heavy Industries (Mitsubishi Jukogyo) bought a stake in Mitsubishi Motors as part of the rescue package that was organized and is co-operating on diesel engine development (MHI makes industrial engines).

Many of Japans smaller carmakers are still publicly listed and only partially owned by larger companies you may be familiar with. Only recently have the larger companies begun taking majority stakes in the companies that develop and build vehicles for them.

If we include only those with their own dealer networks:

1. Suzuki

2. Daihatsu-just over 50% owned by Toyota.

3. Honda

4. Nissan

5. Mazda

6. Mitsubishi

7. Toyota

8. Mitsuoka (the smallest-builds a midengine sportcar and rebodies vehicles produced by other companies)

9. FHI (Subaru)

10. ??

There are many more semi-independent companies which design and build vehicles:

Pajero Manufacturing (Mitsubishi)

Central Motor Co. (Toyota)

Kanto Auto Works (Toyota)

Toyota Industries (the original loom company, still builds textile machinery and supplies Toyota's diesel engines)

Toyota Auto Body

Nissan Shatai

Yachiyo Industry (Honda - develops and builds all Honda's kei cars)

(just the ones with their own websites).

Another company which designed and built Toyota's Land Cruiser was recently (a few years ago) spit between Toyota Auto Body (vehicle manufacturing) and Toyota Boshuko (textiles and seating).

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Perhaps Suzuki is including Lexus, since neither Nissan nor Honda have separate luxury brands in Japan. Mazda once sold cars under the efini, Autozam and Eunos brands, but they're long gone (the dealer networks are partially intact but now sell Mazda-branded cars).

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Just because Suzuki (and Mitsubishi/Isuzu) is small in the US doesn't mean they're on the verge of collapse around the world. Suzuki makes quite a few vehicles for Japan and is very popular in Japan as well as China and India. I don't see Suzuki just suddenly going away as a four-wheeled vehicle maker. If anything, they're among the best positioned if oil prices ever shift higher more permanently than we saw recently.

As for the top automotive manfacturers in Japan, I don't think Mitsuoka was even on the radar as the "ten" companies. My count would include the Big3 (Toyota, Nissan, Honda), the small car players (Daihatsu, Suzuki), the smaller mid-range players (Subaru, Mitsubishi), and the truck makers (Isuzu, Hino, and Nissan Diesel).

In Japan, the local manufacturers have multiple dealer networks selling (primarily) one brand of vehicles. In the US, it doesn't work that way so manufacturers need to come up with unique brands for each dealer network. Where GM in America has Buick-Pontiac-GMC, Chevrolet, Saturn, and Cadillac selling distinctly branded vehicles, Toyota in Japan has Netz, Corolla, and Vista all selling Toyota-branded vehicles (plus Lexus' own network).

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