This document discusses mergers and acquisitions (M&As) in the automobile sector. It provides an overview of the global and Indian automobile industries and trends in production, sales, and major companies. M&As are becoming more common as companies consolidate to cut costs, upgrade technology, and access new markets. The document analyzes several case studies of M&As, including Ford's acquisition of Mazda and the Renault-Nissan alliance. It concludes that while M&As can help companies grow, their success requires careful strategic integration to overcome issues like clashes of culture.

1. Group 6
Sameep Kunja 2011SMN6501
Rajesh Sinha 2011SMN6502
Anita Singh 2011SMN6504
S Gayathri 2011SMN6509
Mergers & Acquisition in
Automobile Sector

2. Objectives & Methodology
Growth of auto sector with special reference to India
Study Major M & As in the auto sector
Analyze growth of auto sector and identify current
and emerging issues in strategic management
Analyze major M & As, their outcomes and lessons
learned

3. Introduction
Auto industry one of the largest industries & key sectors of any
economy
Growth registering a 30 % increase over the past decade
Sector consists of commercial vehicles, multi utility vehicles,
passenger cars, two-wheelers, three-wheelers, tractors and related
auto components
In the initial years, US dominated the automobile markets around
the globe with no notable competitors.
However, after the end of the Second World War in 1945, the
Automobile Industry of other technologically advanced nations such
as Japan and certain European nations gained momentum

4. International Production
(Source: http://oica.net)

5. International Sales
Data Source: http://www.siamindia.com

6. Top 10 Companies
Toyota
General Motors
Volkswagen
Renault-Nissan
Hyundai-Kia
Ford
Honda
Peugeot-Citroën
Suzuki-Maruti
FIAT

7. INDIAN PERSPECTIVE

8. Indian Auto Sector - Sales
Data Source: http://www.siamindia.com

9. Indian Auto Sector - Sales
Data Source: http://www.siamindia.com

10. Indian Auto Sector - Production
Data Source: http://www.siamindia.com

11. Indian Auto Sector - Exports
Data Source: http://www.siamindia.com

12. Current Trends
Globalization is pushing auto majors
To consolidate
Upgrade technology
Enlarge product range
Access new markets
Cut costs
Resorted to
Common platforms
Modular assemblies
Systems integration of component suppliers
Ecommerce

13. Emerging & Future Trends

14. Reasons for M & As
Achieving Cost Efficiencies
Engage new markets by global alliances
Industry Consolidation
Bolstering Core Competencies
Geographic outlook
Divesting non-core assets
New Technologies

15. Automobile M&A trends

16. Automobile M&A trends

18. M & A Cases
Mazda in financial difficulties and beginning with
7 % in 1979 Ford acquires controlling interests
with 33.4 % in 1997
Joint projects save Mazda $90m/year
Since 2008, Ford has gradually reduced stake to
3%
Remain strategic partners through JV and
exchange technological information

19. M & A Cases
Alliance due to financial problems of Renault
and losing market share & under utilization of
capacity of Nissan
Present production – 4th in the world
JV Initiatives
Common platform for small cars
Return to Mexican market
Expansion in Europe & growth in Asia

20. M & A Cases
Tata acquired Jaguar and Land-Rover from Ford
in 2008 for $2.3b
Wide spread skepticism about Tata managing
luxury brands & paying high price
Tata gets JLRs manufacturing plants, advanced
design centres & IPR
Tata gets recognition & credibility across the
world

21. CONCLUSION
Corporate acquisitions effective means to grow larger &
competitive
Requires exacting strategic management & integration strategies
& involves some risk
Suppliers using M&A to adjust to changing regulations in
world market
Globalization has caused international active auto
component manufacturers to shrink from 32 in 1980 to just
14 in 2007
Shifting customer behaviour calls for radical new
approaches to future mobility
Issues becoming universal & are expected to converge by 2025

22. CONCLUSION
Procurement, investment & personnel policy aligned with
global benchmarks & list pruned to select few suppliers
Suppliers expected to deliver ever-more-complex systems
at sites spread across the world
Major reasons for failure of M&As is lack of due diligence,
clash of cultures & failure to integrate
Too many brands and capacity in Chinese auto market &
could result in increased M&A activity in China. Chinese
companies looking to acquisitions for new technologies and
consumer markets
Companies seeking partners to spread costs and risks for
developing next generation environment friendly cars

23. References
1.Ernst & Young Website, http://www.ey.com/GL/en/Industries/Automotive
2. KPMG Website, http://www.qfinance.com/sector-profiles/automobiles
3. PWC Website , http://www.pwc.com/gx/en/automotive/industry-publications-andthought-
leadership.html
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Application of Altman’s Model, Research Journal of Finance and Accounting
ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol 2, No 3, 2011 155
5. S. Ray, Economic performance of Indian automobile industry: an econometric
appraisal, Business Intelligence Journal January 2012
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failure , Int. J. Automotive Technology and Management, Vol. 11, No. 1, 2011
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for developing countries?, Int. J. Technological Learning, Innovation and
Development, Vol. 4, Nos. 1/2/3, 2011 181
8. Kang, N. and S. Johansson (2000), “Cross-Border Mergers and Acquisitions: Their
Role in Industrial Globalisation”, OECD Science, Technology and Industry
Working Papers, 2000/01, OECD Publishing

24. References
9. F.Becker-Ritterspach, GertBruche, Capability creation and
internationalization with business group embedded ness – the case of
Tata Motors in passenger cars, European Management Journal (2012)
30, 232– 247
10. Development of the automotive sector in selected countries of the
ESCAP REGION, Proceedings and country papers presented at the
Regional Consultative Meeting on Promotion of Intraregional Trade
and Economic Cooperation in the Automotive Sector.
11. N.H. Kang, S. Johansson, Technology and Industry Working Papers
2000/01, Cross-Border Mergers and Acquisitions: THEIR ROLE IN
INDUSTRIAL GLOBALISATION, , OECD Science
12. http://www.oica.net
13.http://www.automotiveworld.com/news/oems-and-markets/79140-
auto-industry mergers- bigger-is-not-always-better
14.http://www.reportsure.com/automotive-reports/automotive-mergers
acquisitions. aspx
15. http://www.qfinance.com/sector-profiles/automobiles