FUTURE PROOF
Thanks to mega-mergers the automotive gene pool is running rapidly dry, says Paul
Just how big do you want your car company to be? It’s a relevant question, because the Peugeot Group and FCA are finalising their merger – and taking, by the way, the silly made up name Stellantis. As with every mega-merger it’ll mean less biodiversity on Planet Car, because vehicles from different brands get pulled by the same engines and ride on the same platforms and use the same electronics.
We’ll have Peugeot, Fiat, Citroen, Alfa Romeo, Vauxhall, Jeep, DS, Abarth and Maserati springing from the same gene pool. Plus, from the US market perspective, Chrysler, Dodge and Ram. You wouldn’t want them to share too much. Just like there are complaints when VW, Audi, Skoda and Seat knock out cars not easily distinguished. Can you really tell their crossovers apart? Really? The difference is little more than, literally, a veneer. Porsche’s and Lambo’s big SUVs have much the same trouble. Then you’ve the Renault-Nissan alliance: Qashqai and Kadjar, thoroughly blurred, soon to be joined by a Mitsubishi.
So most European-branded cars are accounted for by just three big car companies. Plus Ford. And Ford feels too small and exposed, so is getting into bed with Volkswagen
“MOST EUROPEAN-BRANDED CARS ARE ACCOUNTED FOR BY JUST THREE BIG COMPANIES”
for electric vehicles, pickups and more. Then BMW (including Mini) and Mercedes-Benz, and stragglers including Volvo (part of Geely) and JLR (Tata).
So it’s a bad thing, right? On the other hand it means, in theory, better cars at better prices as the bigger entities can afford to do more thorough engineering work, and amortise that across more cars sold. They can also buy the necessary commodities and components in greater bulk, pushing down prices. Economics 101. They justify the merger by claiming they’ll “pass on the savings to car buyers”, when they mean “pass on most of the savings to their shareholders”.
So there you are. It’s what’s happening. I’m just saying you might like to think how far you’d like this consolidation to go.
Maybe look to other industries to see the effects. I was nudged into this musing because I just had my eyes tested. The opticians, David Clulow, is owned by glasses firm Luxottica, who merged in 2018 with lens supplier Essilor. That corporation owns dozens of glasses brands right up to Ray-Ban. Lenses, frames, shops: it has about 30 per cent of the global glasses market. I figured that probably gave it too much control over my money and looked elsewhere.
I’m all in favour of monopoly in other sectors. It’s a simple demarcation: are the goods or services being made for the benefit of all? So a health system works better (you’re welcome to accuse me of a lefty worldview) when centralised and shorn of the profit motive. Schools, police and the fire service, too – if my house is alight, I don’t want competing bids. But choosing a car, we do want at least a certain level of competition don’t we?