Executive Briefings

Automakers Must Cooperate to Amortize Costs, Target Developing World More

A couple of recent news items clearly point to a new direction for the global auto industry: One was the decision by Daimler and Renault-Nissan to cooperate in the development of small cars and small engines. The other was the news that General Motors sold more vehicles in China during the first quarter of 2010 than it did in its home market of North America.

The two messages couldn't be clearer: Automakers need scale in order to amortize the escalating costs of new technology and product development. And they also need a strong presence in developing markets because their traditional strongholds in the U.S., Western Europe, and Japan have all but stopped growing or in some cases are shrinking.

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A couple of recent news items clearly point to a new direction for the global auto industry: One was the decision by Daimler and Renault-Nissan to cooperate in the development of small cars and small engines. The other was the news that General Motors sold more vehicles in China during the first quarter of 2010 than it did in its home market of North America.

The two messages couldn't be clearer: Automakers need scale in order to amortize the escalating costs of new technology and product development. And they also need a strong presence in developing markets because their traditional strongholds in the U.S., Western Europe, and Japan have all but stopped growing or in some cases are shrinking.

Read Full Article