Let’s talk about automotive mergers again, because Sergio Marchionne, CEO of Fiat-Chrysler Automobiles, keeps going on about them being necessary to achieve the economies of scale needed for automakers in the current, highly competitive marketplace, and in order to spread the cost of investments in fuel efficiency, connectivity, autonomous driving and electrification. Okay, in all honesty, Sergio isn’t the only one saying it’s becoming “too expensive to make cars”, but he is the most outspoken one on the subject and he keeps flirting with other automakers to merge, most notably General Motors, so he’s an easy target for my rants.

And to a certain degree I can relate with him. Like he says, it doesn’t make any sense at all for every single automaker to develop -for example- hydrogen fuel cell technology in-house, so each of them has to “invent the wheel” by all themselves. Of course it would save tons of money for the automakers, and therefore for new car buyers, if development costs of a new technology could be spread among a cooperation of automakers, but guess what? This already happens a lot without any of them having to actually merge. Besides that, a lot of technologies in vehicle safety or fuel efficiency already get developed by suppliers, like Bosch, Magna or Denso, who then sell a license to the technology to a number of automakers, and thus spreading the development costs. [Read more…]