VW, Ford form alliance to adapt to fragmented markets
INTERNATIONAL – The proposed alliance between Volkswagen and Ford shows that the days of carmakers going it alone are over, like tariffs, new technology and tougher emissions rules fragment markets that were once global.
It and similar tie-ups may be the fulfilment of late Fiat chief executive Sergio Marchionne’s 2015 prediction of a new era of auto industry consolidation.
Firms that once sought a vehicle with universal global appeal to create economies of scale are now seeking advantages in specific market segments like hybrid SUVs, North American pickup trucks or European city cars.
The shift toward electric and autonomous vehicles and a trade war that is forcing carmakers to build separate factories for Europe, the United States and China are helping accelerate the trend. So is the global clampdown on emissions following VW’s 2015 diesel cheating scandal.
Carmakers long aspired to follow Henry Ford’s idea of using one set of production tools to supply markets all over the world at the lowest possible cost.