If gm/chrysler go down, it means more business for the other major players. Whose best set to benefit?
Which companies will benefit most from GM and Chrysler being out of the picture when the recession is over?
Answers
3943 points
MNSL answered 7 months ago …
I do not think in the short run any auto maker will benefit due to situation in the auto industry and world economic situation.
In the long run some Japanese cars will benefit if world economy improves.
348 points
Sensei answered 7 months ago …
If GM and / or Chysler "go down", my guess is that they'll come back in some modified form. I just can't envision these huge factories, occupying large tracts of land, with padlocks on their doors. But, let's assume that these companies just vanish. Then what?
To answer the question, all you have to do is to stand on a major intersection in any city in America, watch the cars that pass by, and eliminate the GMs and Chryslers. Whatever those other people are driving is what everyone will be buying when GM and Chysler are gone.
People buy "brand" based on two things: they like the brand (or they dislike the alternatives), and recommendation of friends.
They like the brand. "I've always driven a GM." This guy is always going to buy a GM, even if Toyota builds a better car for less. Or, in the alternative, "I hate Ford." Again, this guy will buy, say, a GM.
Now that he can't buy a GM, what will he do? He'll switch to the second alternative - he'll buy what his friends / associates recommend. My guess is that the Japanese cars will dominate in this kind of environment.
There is one "spanner in the works" however, and that is ... American Jingoism. (Sorry if you think this is an insult. It isn't meant to be.) Americans will likely adopt the "Buy American" posture and for most, that means ... Ford! Never mind that Toyotas sold in the US are manufactured here, in American plants, by American auto workers. The perception is that "Toyota is Japanese" and "Ford is American." And that perception trumps everything else.
So, while I think the major beneficiaries of the total collapse of GM and Chrysler would likely be Toyota, Nissan and Honda, I wouldn't discount Ford.
4075 points
EthanR answered 7 months ago …
The people who will only buy cars that are "made in America" will gravitate toward Ford, so GM/Chrysler out of business will help Ford . Other people will decide to throw in the "made in America" towel and gravitate toward Honda and Toyota. As the other answer said, all three should profit from the demise of GM/Chrylser. On the other hand, I don't know where all of those laid off workers are going to find jobs. I seriously doubt the other auto manufacturers will be hiring for awhile.
Read more from EthanR
731 points
thinker70 answered 7 months ago …
While it is logical that car buyers would buy one of the other brands at least BUILT in America even if it is a foreign OWNED brand. The assumption being that GM/Chrysler would just disappear, which is highly unlikely.
Companies forced into bankruptcy do not necessarily cease to exist, they reorganize/refinance and potentially become even stronger and more competitive once they have shed their debt overhang and legacy costs that made them less than competitive. Chrysler is forging an alliance with Fiat which has world wide connections.
What is clear is that total vehicle sales are likely to drop for at least a few years, so SOME plants will close, but who is to say that these plants and available skilled workers will not be taken up by other stronger foreign players who do not yet have plants in America? Two prospects would be Suburu and Tata of India, and who knows, maybe even a Chinese company. China has the U.S. dollars to invest and there burgeoning automobile industry does not YET have the technical expertise of GM for example, so they might buy up pieces out of a bankruptcy.
I simply reject the premise of "GM and Chrysler being out of the picture" they will probably survive in some scaled down form. Chrysler also has some desirable assets, such as JEEP, and both need to shed some costs and need better management. Ford may well come up the middle and be the prime beneficiary of less competition from the other two American companies, at least in the reorganization period which may well take several years to fully stabilize.
362 points
smi answered 6 months ago …
At current market scenario no player makes benefits. Ford would have benefitted the most if it had Jaguar and land rover in its bouquet.. But now some italian auto giants are hot runners in the race...
Read more from smi
