New Trend Car Makers Push Partnerships

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New Trend Car Makers Push Partnerships.Car Makers Push Partnerships

to survive in high end car business. Car makers work together. not half-hearted they are sharing partnerships with its competitors and the best combining their techniques together to produce a high quality car in the world automotive market. Nissan Motor Co.'s premium brand is to start producing a new compact car based on Daimler AG's Mercedes-Benz brand technology, the companies said Wednesday, in the latest sign the world's biggest auto makers' are prepared to form partnerships to share costs rather than go it alone.

Mergers and acquisitions have been thin on the ground in the auto industry lately, but partnerships are becoming increasingly popular as they allow companies to team up with limited financial risk.

The move to create a new model for Nissan's high-end Infiniti brand is part of cooperation deal between Daimler, Nissan and its alliance partner, Renault SA, on developing small vehicles and engines to reap cost synergies.

Daimler SP250

Renault is looking at using Mercedes-Benz components, too, Carlos Ghosn, chief executive of the Japanese and French car makers, said at a press conference at the Frankfurt Motor Show held jointly with Daimler CEO Dieter Zetsche.

Given the uncertain macro outlook for 2012, most suppliers are prepared to cut capital expenditure plans and hold back on acquisitions in order to preserve cash should markets reverse sharply, UniCredit said Wednesday in a report for investors, and noted such moves proved successful in 2009.

Nick Reilly, president of General Motors Co.'s European business, Tuesday said GM has become more open to alliances with other companies "for reasons of sharing investment costs and sharing risk" as automotive technologies can be expensive to develop.

GM Europe is in discussions with several companies, Reilly said, although he declined to comment on specific deals.

Dutch navigation system maker TomTom NV is in talks with German car makers to provide integrated systems, Chief Executive Harold Goddijn said, but he also declined to comment further.

The announcements follow Ford Motor Co. and Toyota Motor Corp. last month signing a memorandum of understanding on developing a gas-electric hybrid system for light trucks and sport-utility vehicles.

Partnerships aren't limited to traditional players within the auto industry, and often seek to improve environmental efficiency as regions across the world tighten emissions regulations, as indicated by recent agreements like the one on electric cars between Sweden's Volvo Car Corp. and German industrial conglomerate Siemens AG.

Although partnerships offer attractive rewards, cultural divides and different expectations mean they can be rocky.

Suzuki Motor Co. has said it wants to divorce Volkswagen AG and buy back a 19.89% stake held by the German car maker after planned cooperation on small cars turned sour.

However, Volkswagen has said it doesn't want to sell. It bought the stake for about EUR1.7 billion in 2009 to benefit from the Japanese automaker's expertise in the small-car segment and better access to the Indian market.

But the Japanese company's decision to buy diesel engines from Italy's Fiat SpA created friction that came to a head over the weekend when Volkswagen accused Suzuki of infringing their cooperation agreement.

An alliance between Fiat and India's Tata Motors Ltd. nearly hit the rocks recently after sales of Fiat cars in India proved lackluster. Last month, Fiat Chief Executive Sergio Marchionne said the Italian company will stay in the joint venture with its Indian partner but it will seek to change its terms to improve its fortunes.

The impact of the partnership between the world car makers are very good for car users throughout the world both in terms of technology as well as the standard car will increase, so does the service they provide, of course.